By Mary Welch
LJL BioSystems Inc. felt the cold ax of a poor financial market lopping off its plans to raise money as the Sunnyvale, Calif.-based company killed its offer to sell 2.5 million shares of stock.
The company withdrew the offering in "light of current market conditions," it said in a statement. LJL could not be reached for comment.
When LJL proposed the offering a month ago, the company's stock was trading at $28, which would have yielded the company about $70 million. At today's stock price of $15.75, LJL would have grossed about $39.37 million, a loss of almost half - or $30.63 million. (See BioWorld Today, March 15, 2000, p. 1.)
In addition, the company had offered the underwriters an additional 375,000 shares to cover overallotments.
Robertson Stephens, of San Francisco, and Chase H&Q, of New York, were the offering's co-lead underwriters. Dain Rauscher Wessels, of Minneapolis, was co-manager.
In the SEC filing, LJL said it would use the proceeds to fund research and development and sales and marketing activities, especially those relating to its genomics and consumables business. Funds also would go to investments in manufacturing, administrative infrastructure, working capital and other general corporate purposes.
LJL designs, produces and sells products and services that enhance the drug discovery process.
For the fiscal year 1999, revenues totaled $9.9 million, and the net loss was $8.1 million. The company had $8.46 million in cash as of Dec. 31.
However, the company raised $19 million in a private placement of stock in February. The company sold 1.76 million shares to new and current investors at $11 per share, which was a substantial discount to the market price at the time of the offering - $18.75 a share. After the placement, the company had about 14.5 million shares outstanding. (See BioWorld Today, Feb. 4, 2000, p. 1.)
LJL BioSystems' stock (NASDAQ:LJLB) closed Monday at $15.75, up 56.2 cents.