By Matthew Willett

Dyax Corp. priced the 15th initial public offering of a U.S. biotech company in August, offering 4 million shares at $15 each for a gross of $60 million. That followed Friday's $35 million initial offering of 5 million shares of Telik Inc. stock at $7 each.

Cambridge, Mass.-based Dyax said it will use the proceeds for general corporate purposes, in addition to research and development, possible technology acquisition and capital expenditures. The company said it expects the offering proceeds to fund corporate expenditures for about the next 18 months.

The company's stock gained $10.75 Tuesday, or 72 percent, to close at $25.75.

J.P. Morgan and Co. was lead manager for the transaction, and Lehman Brothers Inc. and Pacific Growth Equities Inc. acted as co-managers. They have been granted an option to purchase an additional 600,000 shares to cover overallotments.

Dyax CEO Henry Blair said, "We're very pleased. For a number of years, we've tried to educate the scientific community to the power of phage display, and now we've managed to educate the financial community to its power. We're pleased with the response from the financial community to the offering. It's a credit to all the hard work by the great people in the company."

Dyax uses its proprietary technology, phage display, to identify compounds with therapeutic or diagnostic potential. Phage display technology, identified in the late 1980s, uses a small bacteria virus as a display surface, allowing researchers to individually display up to tens of billions of proteins and peptides and quickly identify those that bind specifically to a molecular target.

The company has used the phage display method to identify two targets currently in Phase I clinical trials: EPI-HNE4/Reltran, a potential treatment for cystic fibrosis, chronic obstructive pulmonary disease, asthma and acute respiratory distress syndrome; and DX-88, a potential treatment for abnormal hereditary swelling of body tissue and for complications of cardiopulmonary bypass surgery and rheumatoid arthritis.

Dyax is in collaboration with Genzyme Corp., of Cambridge, Mass., the company's fifth-largest shareholder, for the co-development of EPI-KAL2, a recombinant protein that mimics the effect of a natural inhibitor of C1-esterase and kallikrein for treatment of hereditary angiodema (see BioWorld Today, Dec. 2, 1998, p. 1). A collaboration with DebioPharm SA centers on European development of Dyax's neutrophil elastase inhibitors for treatment of cystic fibrosis and other pulmonary inflammation diseases.

Dyax also collaborates with Amgen Inc. for the development of a phage library for the Thousand Oaks, Calif.-based company and has licensed to Human Genome Sciences Inc., of Rockville, Md., its phage display technology.

Since its founding Dyax has raised about $68 million through equity investments. As of June 30, the company had $16.2 million in cash and cash equivalents. After the offering, the company has 18.1 million shares outstanding.

Telik Developing Small-Molecule Cancer Drugs

Telik Inc., of South San Francisco, plans to use the $35 million raised in its initial offering for research and general corporate purposes.

Telik focuses on small-molecule biopharmaceuticals, largely in the oncology market. Its pipeline includes TLK286 for chemotherapy-resistant solid tumors, TLK199 for chemotherapy-induced neutropenia, and TLK17411 for Type II diabetes.

The company's collaborators include Scios Inc., of Sunnyvale, Calif., and Genaissance Pharmaceuticals Inc., of New Haven, Conn.

TLK286, a treatment for chemotherapy-resistant cancer that works by bonding to the cancer-treatment-defeating protein glutathione S-transferase, entered clinical trials in January.

TLK199 is a small-molecule candidate designed to treat neutropenia, a depression in white blood cell count as a result of chemotherapy. The product is in preclinical testing, and the company plans to file an investigational new drug application with the FDA for the compound by the end of the year.

Lehman Brothers Inc. was the lead underwriter for the offering, and co-managers were Chase H&Q, Legg Mason Wood Walker Inc., UBS Warburg LLC and Fidelity Capital Markets. Telik is offering 750,000 shares to underwriters to cover overallotments.

After the offering, the company has 21.8 million shares outstanding. Before the offering, the largest shareholder was Sanwa Kagaku Kenkyusho Co. Ltd., of Japan, with 15.2 percent of the company. As of June 30, Telik had cash and cash equivalents of $9.44 million.

Telik's stock (NASDAQ:TELK) closed Tuesday at $7.125, up 12.5 cents from the IPO price.

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