By Karen Pihl-Carey

Two genomics companies entered the public market on Tuesday with deCode Genetics Inc. raising $172.8 million and Transgenomic Inc. raising $67.2 million.

Transgenomic, of Omaha, Neb., raised slightly more than the $64.4 million it had anticipated from an initial public offering (IPO) when it filed with the SEC in March, while deCode raised less than the $200 million it had anticipated. (See BioWorld Today, March 15, 2000, p. 1; and March 10, 2000, p. 1.)

Both companies watched their stock prices soar. DeCode's shares (NASDAQ:DCGN) opened at $28.50 and closed at $25.437, up $7.437, or 36 percent, from the $18 per share IPO price. Transgenomic's stock (NASDAQ:TBIO) opened at $24.75 and closed at $24, up $9, or 60 percent, from the $15 per share IPO price.

DeCode, of Reykjavik, Iceland, upped its number of shares offered from 8 million to 9.6 million. The company also gave the underwriters - Morgan Stanley Dean Witter and Lehman Brothers, both of New York - an option to purchase another 1.44 million shares to cover overallotments. If exercised in full, the overallotment option would raise another $25.9 million.

The company intends to use proceeds from the IPO for the deCode Combined Data Processing system, which enables the cross-reference of data from the Icelandic Health Sector Database with genealogical and genotypic data. The company believes the system will allow users to build more complete models of the interplay of genes, the environment and disease. IPO funds also will go toward research and discovery programs, as well as to cover capital expenditures and for working capital and general corporate purposes.

As of March 31, deCode had cash and cash equivalents of $40.7 million. Following the IPO, the company has about 43 million shares outstanding.

DeCode's mission is to conduct human genetic research in order to understand the causes of disease. It has identified eight locations for disease-causing genes, as well as 12 specific candidate disease genes. The company has received milestone payments for finding the location of a gene associated with stroke, as well as for mapping the location of genes contributing to Alzheimer's disease, schizophrenia and osteoarthritis.

Transgenomic's IPO consisted of 4.48 million shares at $15 per share, above the $12 to $14 price range the company listed in its original SEC filing. The IPO includes an option for underwriters Chase H&Q, of San Francisco; Bear, Stearns & Co. Inc., of New York; and Dain Rauscher Wessels, of Minneapolis, to purchase up to an additional 672,000 shares of common stock to cover overallotments. If exercised in full, the overallotment option would raise another $10.1 million.

The company expects to use proceeds to reduce outstanding debt, to acquire notes, and for general working capital needs, including research and development and sales and marketing expenses.

Transgenomic provides research tools that enable researchers to discover and understand variation in the human genome in order to accelerate and improve drug development and diagnostics.

As of March 31, the company had about $140,000 in cash and cash equivalents. Following the IPO, Transgenomic has about 17.8 million shares outstanding.

A third company, Pain Therapeutics Inc., of South San Francisco, went public last Thursday, raising $65 million through the issuance of 5 million shares at $13 each. The underwriters - Thomas Weisel Partners LLC and CIBC World Markets Corp., both of New York, and Tucker Anthony Cleary Gull Inc., of Boston - have an option to purchase 750,000 additional shares to cover overallotments. If exercised in full, the option would raise an additional $9.75 million for Pain Therapeutics.

The company said net proceeds would go toward working capital and general corporate purposes, including the development of product candidates, clinical research and development, formulation and manufacturing, and commercialization activities. It also may use a portion of the proceeds to acquire or invest in complementary businesses or products.

Pain Therapeutics is developing a new generation of painkillers by reformulating opioid drugs, such as morphine. The company has four product candidates in Phase II trials.

As of March 31, Pain Therapeutics had $22.2 million in cash and cash equivalents. Following its IPO, it has about 25.8 million shares outstanding.

The company's stock (NASDAQ:PTIE) closed Tuesday at $18.875, down $1.

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