By Mary Welch
Deltagen Inc. filed to raise $100 million in an initial public offering (IPO) designed to expand its product and technology development and grow its sales and marketing organization.
The company, based in Menlo Park, Calif., develops technology to convert raw genetic data into mammalian gene function information to help expedite the drug discovery process.
Salomon Smith Barney Inc., of New York, is the lead underwriter. Robertson Stephens, of San Francisco, and U.S. Bancorp Piper Jaffray Inc., of Minneapolis, are co-managing the effort.
Founded in 1997 by two former scientists of South San Francisco-based Genentech Inc., Deltagen's proprietary platform offers pharmaceutical and biotechnology partners access to information on the in vivo functional role of hundreds of novel genes annually. It converts raw genetic data into mammalian gene function information to expedite the drug discovery process. The technology enables the company to select genes with therapeutic potential and delete, or knock out, these genes in mice and do so on a large scale.
In February, the company launched DeltaBase, which provides functional information about mammalian gene families with proven relevance to small-molecule drug discovery.
The company also has DeltaSelect, a target validation program that is provided to DeltaBase subscribers. Under this program, customers select genes for entry into the company's target validation system and receive the resulting gene function information utilizing the same information technology platform employed in DeltaBase.
In addition, the company offers Delta-GT that provides gene identification and enables the determination of gene function by knockout analysis and specifically addresses proteins that are secreted in an organism.
In February, the company raised $22.5 million in a private placement that was to aid in the launch of DeltaBase. (See BioWorld Today, Feb. 2, 2000, p. 1.)
Deltagen reported 1999 revenues of $1.2 million, and a net loss of $13.8 million. As of Dec. 31, the company had $848,000 in cash, but that doesn't take into account the money raised privately.
The company said that with the proceeds from the recent financing, along with revenues and the money from the IPO, it will have sufficient money to fund operations through 2001, according to the SEC registration statement.
Deltagen has collaborations with Merck & Co. Inc., of Whitehouse Station, N.J.; Schering-Plough, of Madison, N.J.; and Pfizer Inc., of New York. Pfizer accounts for 64 percent of the company's revenues.
Among the company's largest institutional shareholders are The Sprout Group, of Menlo Park, with 28.7 percent; Stipa Investments L.P., of Menlo Park; and entities affiliated with Boston Millennia Partners, of Boston.
Deltagen's proposed NASDAQ ticker symbol is DGEN.