By Mary Welch

Two more companies knelt before the initial public offering altar, as Kosan Biosciences Inc. filed to raise $80 million and Telik Inc. proposed raising $75 million.

South San Francisco-based Telik will use the proceeds for research and development and general corporate purposes.

Warburg Dillon Read LLC, of New York, is the lead underwriter for Telik. Chase H&Q, of New York, and Legg Mason Wood Walker Inc., of Baltimore, are co-underwriters. The company did not estimate an offering price.

Telik, whose drug discovery and development efforts have focused mainly on cancer and diabetes, intends to have two cancer candidates in clinical trials by year¿s end. The first, TLK286, began clinical trials in January. Its second candidate, TLK199, is expected to enter trials later this year. TLK286, a small-molecule drug, is intended for the treatment of major cancers that have resisted standard treatments. TKL199 is intended for the treatment of the depletion of infection-fighting white blood cells, which is a side effect of cancer therapy.

Telik, formerly known as Terrapin Technologies Inc., retains the worldwide commercialization rights to both product candidates.

Telik is developing proprietary, orally active small-molecule insulin receptor activators for the treatment of Type II diabetes. The company expects to select a product candidate for development by the end of the year.

Telik¿s proprietary drug discovery technology is TRAP, which uses a probability-based approach to screen compounds. TRAP examines a small representative sample of a small-molecule compound library to quickly find hits and start lead optimization. The system also classifies small-molecule compounds by distinct patterns based on protein-binding properties, rather than chemical structure or other computed parameters.

As a result, TRAP can be used to characterize and/or validate the pharmacology of biological targets, and predict functional relationships with various compounds without having to know the structure of either the biological targets or the compounds, the company said.

The company reported 1999 revenues of $4.2 million with a net loss of $7.1 million. As of Dec. 31, the company had $7.5 million in cash. Also as of Dec. 31, it had 16 million shares outstanding.

Among the largest institutional shareholders are Sanwa Kagaku Kenkyusho Co. Ltd., of Nagoya, Japan, which owns about 15 percent of the company, followed by Alta V Management Partners LP, of San Francisco, with 12.6 percent; International BM Biomedicine Holdings AG, of Basel, Switzerland with 9 percent; and Advent International Corp., of Boston, with 7.5 percent.

Kosan Biosciences focuses on the genetic manipulation of natural molecules known as polyketides using proprietary gene-manipulating technologies to generate pharmaceutical product candidates.

The company, based in Hayward, Calif., intends to use the net proceeds for advancing its product candidates through preclinical and later-stage development, discovering new product candidates and expanding its technology platform, including in-licensing opportunities.

Warburg Dillon Read LLC, of New York, is the lead underwriter, and CIBC World Markets Corp. and Prudential Securities Inc., both of New York, are co-managing the offering. The SEC filing did not disclose a proposed share price.

Kosan has programs for the discovery and development of novel polyketides for bacterial infections, gastrointestinal motility disorders, mucus hypersecretion, cancer, immunosuppression and nerve regeneration.

For the year 1999, the company had revenues of $5.3 million and a net loss of $14.4 million. It had $2 million in cash on hand as of Dec. 31.

Among the company¿s major institutional stockholders are AG Biotech Capital LLC; Alta California Partners, of San Francisco; Alta Embarcadero Partners, of San Francisco; Franklin Biotechnology Discovery Fund, of San Mateo, Calif.; Lombard Odier & Cie Ltd., of Geneva, Switzerland; and S.R. One Ltd., of Wayne, Pa.

Telik¿s proposed Nasdaq ticker symbol is TELK; Kosan¿s is KOSN.