By Lisa Seachrist
The public markets continued to favor the biotech industry, with four more companies pricing initial public offerings late Wednesday and Thursday.
Genomics analysis specialists Deltagen Inc. and Rosetta Inpharmatics Inc. led the pack, raising $105 million and $100.8 million, respectively. Inspire Pharmaceuticals Inc. raised $66 million in its effort, while Versicor Inc. raised $50.6 million.
Deltagen, of Menlo Park, Calif., sold 7 million shares of common stock at a price of $15 in order to expand its product and technology development, which converts raw genetic sequences into mammalian gene function information, and grow its marketing organization. At the completion of the offering the company had 28.2 million shares of common stock outstanding.
Salomon Smith Barney Inc., of Brooklyn, N.Y., served as lead underwriter with Robertson Stephens Inc., of San Francisco, and U.S. Bancorp Piper Jaffray Inc., of Minneapolis, co-managing the offering. The company is offering the underwriters the opportunity to purchase an additional 1.05 million shares to cover overallotments.
Deltagen was founded in 1997 by two former scientists from South San Francisco-based Genentech. The company offers its pharmaceutical and biotech partners access to information on the in vivo role of hundreds of novel genes. In February, the company launched DeltaBase, which provides functional information about mammalian gene families with proven relevance to small-molecule drug discovery. (See BioWorld Today, April, 17, 2000, p. 1.)
The company has a target validation program, DeltaSelect, which allows customers to select genes for entry into the company's target validation system and receive gene function information using the same information technology platform employed in DeltaBase. The company's Delta-GT program identifies genes and determines the gene's function by creating a mouse with the gene deleted or knocked out. The program is specifically aimed at secreted proteins.
Deltagen's stock (NASDAQ:DGEN) closed Thursday with a 27 percent first-day bounce at $19, up $4.
Rosetta Inpharmatics sold 7.2 million shares at a price of $14 a shares in order to expand its informational genomics platform. At the completion of the offering, Rosetta, of Kirkland, Wash., had 29.9 million shares outstanding.
Lehman Brothers Inc., of New York, served as lead underwriter. Lazard Freres & Co. LLC, Prudential Securities Inc. and Fidelity Capital Markets, all of New York, co-managed the effort. Rosetta is offering the underwriters an option to purchase up to 1.08 million additional shares to cover overallotments.
Rosetta was founded in 1996 as an informational genomics company focusing on gene expression technology. The company's combination of informatics and genomics allows researchers to explore the causes and consequences of alterations in gene expression and to focus on the cellular processes that are specifically affected by pharmaceuticals, chemicals or genetic engineering.
Last year the company launched its first bioinformatics product, the Resolver system - an integrated, enterprise-wide system for storing, retrieving and analyzing large quantities of gene expression data generated from DNA microarrays. The system allows users to rapidly compare gene expression profiles patterns of large data sets.
The FlexJet DNA microarrays are a next-generation DNA microarray platform. With it Rosetta can design and produce customized oligonucleotide arrays representing thousands of genes per array in a matter of hours or days. The company also has libraries of high-quality gene expression data in the form of Coherent Expression Data Sets. (See BioWorld Today, March 31, 2000, p. 1.)
Rosetta's stock (NASDAQ:RSTA) rose 28 percent Thursday to close at $17.875, up $3.875.
Inspire Pharmaceuticals raised $66 million, selling 5.5 million shares at an offering price of $12 per share to advance its products through clinical trials. Inspire expects to have five products in clinical trials this year. With the completion of the offering, the Durham, N.C.-based company has 24.5 million shares of common stock outstanding.
Deutsche Bank Alex Brown Inc., of Baltimore, acted as the lead underwriter. U.S. Bancorp Piper Jaffray Inc. and Chase Securities Inc., of New York, co-managed the offering. The company has granted the underwriters the option to purchase 825,000 shares to cover overallotments.
Inspire develops product to treat disease characterized by deficiencies in the body's mucosal defense mechanisms. The company focuses on the mucosal hydration and mucociliary clearance as innate defenses. Inspire's products are based on a proprietary P2Y receptor technology platform. (See BioWorld Today, Feb. 29, 2000, p. 1.)
Inspire has three products in advanced clinical development targeting either respiratory or ophthalmic diseases. INS365 respiratory for chronic bronchitis will enter Phase IIa development in collaboration with Genentech. INS365 respiratory also is partnered with Kissei Pharmaceutical Co. Ltd., of Matsumoto City, Japan, as a treatment for chronic obstructive pulmonary disease including chronic bronchitis. INS365 ophthalmic - a treatment for dry eye disease - is in Phase IIb clinical trials with partner Santen Pharmaceutical Co. Ltd., of Osaka, Japan.
The company will take INS316 into Phase III trials this year as a diagnostic adjunct for lung disease. INS37217 respiratory for cystic fibrosis and INS37217 ophthalmic for retinal detachment will enter Phase I trials this year.
Inspire's stock (NASDAQ:ISPH) closed up 25 percent at $15, up $3.
Antibiotic and antifungal specialist Versicor raised $50.6 million by selling 4.6 million shares at a price of $11 per share to move its products, two of which are in clinical trials, forward. With the completion of the offering the company has 22 million shares outstanding.
Lehman Brothers Inc. was lead underwriter, with Warburg Dillon Read LLC, of New York, and Pacific Growth Equities Inc., of San Francisco, acting as co-managers. The company has offered the underwriters an option to purchase 690,000 shares to cover overallotments.
The Fremont, Calif.-based company develops antifungal and antibiotic drugs. V-Enchinocandin, the company's lead candidate, is a semi-synthetic derivative of the natural product echinocandin B. Obtained from Indianapolis-based Eli Lilly & Co. last year, it is in Phase II studies for the treatment of serious systemic fungal infections.
V-Glycopeptide is a second-generation antibiotic belonging to the same class as the antibiotic of last resort, vancomycin. It is in Phase I development for the treatment of serious systemic Gram-positive infections.
Versicor has a collaboration with Pharmacia & Upjohn, of Bridgewater, N.J., to identify second- and third-generation oxazolidinones, which are active against a broad range of Gram-positive bacteria. The company has an agreement with Novartis Pharma AG, of Basel, Switzerland, to develop deformylase inhibitors.
Versicor's stock (NASDAQ:VERS) closed at $9.906, down $1.093.