LONDON - Pharmagene plc raised #37 million (US$55.5 million) in an initial public offering, becoming the first biotechnology company to join the London Stock Exchange since March 1998. Dealings in the shares began on Monday.

Shares in the Royston, UK, company were priced at #2.85 (US$4.28 million).

The offer consisted of 17.8 million shares, around 36 percent of the company.

Pharmagene was founded in 1998 and specializes in providing human tissue testing services for drug discovery and development. Its Phase ZERO service validates molecular targets and characterizes chemical entities by testing their effects on a wide range of human tissue samples. This process reduces the chances of compounds failing in clinical trials. The service currently has 16 customers, including SmithKline Beecham plc, of London, Bayer AG, of Leverkusen, Germany and Pfizer Inc., of New York.

The company also offers functional genomics data through its Pharmabase database, which quantifies gene expression in normal and diseased tissues, to pinpoint genes of pharmaceutical relevance. This month, Pharmagene will launch a targets database, initially containing details of 600 genes, which shows where they are expressed across a range of tissues.

The money raised in the IPO will enable the company to expand sales and marketing operations in the U.S. Pharmagene also plans to set up a drug development division, using its own testing technologies to identify new indications for compounds that failed in the clinic. To date, the company has identified five compounds it believes could be rescued in this way, and filed patents on three. - Nuala Moran

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