By Debbie Strickland
DoubleTwist Inc. is seeking to go public less than a year after a dot-com makeover that changed the company's name and business focus to capitalize on a flood of new genomics data.
DoubleTwist filed with the SEC to raise up to $86.3 million in an initial public offering underwritten by Lehman Brothers, Dain Rauscher Wessels, Thomas Weisel Partners LLC and Fidelity Capital Markets. The number of shares to be offered and price of those shares are as yet undetermined. The proposed Nasdaq symbol is DBLT.
Formerly Pangea Systems, the seven-year-old bioinformatics company in January launched the DoubleTwist.com research portal, designed to provide a gateway to genomic data, along with analysis and visualization tools. That same month, the company announced more than a dozen new partnerships to bolster the site's content, tools and e-commerce capabilities, including deals with BioTools Inc., of Edmonton, Alberta; SciQuest.com, of Research Triangle Park, N.C.; and Myriad Genetics Inc., of Salt Lake City.
Venture capitalists applauded the online moves. In February, they poured $37 million into DoubleTwist, in a financing round that accounts for more than half of the $66 million the company has raised to date.
DoubleTwist kept up the momentum this summer, launching its own proprietary annotated human genome and gene databases, complete with associated analytical tools. The company also has developed annotated gene databases for three key research organisms - the mouse, the Arabadopsis plant, and the fruit fly. Such products put the Oakland, Calif., company in competition with such large-cap names as Incyte Genomics Inc., of nearby Palo Alto, and Celera Genomics, of Rockville, Md.
Ramping up to compete with such heavyweights is expensive. DoubleTwist used more cash - $10.6 million - in the first six months of 2000 than in all of 1999. The company had $29.5 million in cash remaining as of June 30.
First-half revenues totaled $2.8 million, a 50 percent gain over the comparable 1999 period. The company's key products are so new, however, that evaluating the business is difficult, as DoubleTwist notes in its filing. The company sells access to DoubleTwist.com on an annual per-user subscription basis at one of three pricing levels: Bronze, Silver or Gold. Subscriptions are based on the number of sequence queries and the degree of access to agents, features and data. DoubleTwist also offers free access to some of its products.
DoubleTwist's competitors, notably Incyte, have also been aggressively staking out Internet turf with new online offerings. In March, Incyte Pharmaceuticals changed its name to Incyte Genomics and said it would offer all its products online by the end of the year. Incyte also began offering e-commerce access to clones of human genes in its databases.
Market Receptive To Bioinformatics Offerings
August's packed class of IPOs included two firms specializing in bioinformatics and genomics, Compugen Ltd., of Tel Aviv, Israel, and Lion Bioscience AG, of Heidelberg, Germany. The business model Compugen, as at DoubleTwist, centers on an Internet research portal., LabOnWeb.com. The company raised $50 million. (See BioWorld Today, Aug. 14, 2000, p. 1.)
Lion raised $181.6 million, but follows a more traditional model of partnering with pharmaceutical companies to discover drug targets, in addition to providing bioinformatics tools. Both companies have performed well in the weeks since their debut - Lion's shares have soared about 150 percent, and Compugen is up more than 80 percent.
The market appears to be receptive to such offerings. Another bioinformatics company, Informax Inc., filed in July to raise up to $75 million, but last week bumped up its proposed maximum to $92 million. The offering (including underwriters' overallotment options) would represent about a quarter of the company's shares outstanding, or 15 percent, if options and warrants are taken into account.