By Mary Welch

The shaky market did just fine by Exelixis Inc., as the company raised $118 million in its initial public offering by selling 9.1 million shares at $13 each.

The South San Francisco-based company originally filed for a price range of $10 to $12 but upped the ante despite a sluggish market. In its registration statement, Exelixis, which is a model system genetics and comparative genomics company, said it intended to raise $100 million. (See BioWorld Today, Feb. 9, 2000, p. 1.)

The underwriters have a 30-day option to purchase 1.365 million additional shares to cover overallotments. Goldman, Sachs & Co., of New York, led the offering, with Credit Suisse First Boston Corp. and SG Cowen Securities Corp., both of New York, co-managing.

Exelixis' stock (NASDAQ:EXEL) closed up $2.187 Tuesday, or 17 percent, at $15.187 in its trading debut.

Exelixis intends to use the proceeds for the research and development programs, as well as general corporate purposes. The company has ongoing research in more than 12 different programs for the pharmaceutical, agrochemical, agricultural, diagnostic and biotechnology industries. These programs include the areas of central nervous system, inflammation, metabolic disease, oncology and agricultural biotechnology.

The company, which posted revenues of $12.5 million in 1999 and a net loss of $16.7 million, had $6.9 million in cash as of Dec. 31.

The company's technology involves using model system genetics, a process that takes advantage of the short life cycles, biology and ease of genetic manipulation in species such as fruit fly and the nematode worm.

The company scans the entire genome of the organisms for genes capable of leading to a desired outcome. For instance, it can identify each gene capable of blocking the unregulated cell growth characteristic of cancer cells when targeted by a pharmaceutical, or each gene that will lead to the death of insect pests when targeted by an agrochemical.

Formerly known as Exelixis Pharmaceuticals Inc., it has three collaborations for its PathFinder and other technologies. The first is with Bayer AG, of Leverkusen, Germany, and is focused on the discovery and development of novel insecticides and nematicides for crop protection. Another, with Pharmacia & Upjohn, of Bridgewater, N.J., is in the fields of Alzheimer's disease, Type II diabetes and associated complications from metabolic syndrome. The third collaboration is with New York-based Bristol-Myers Squibb Co. to identify the mechanism of action of compounds delivered to Exelixis by Bristol-Myers.

Committed funding from the collaborations totals more than $180 million.