By Mary Welch
Just weeks after bringing in $20 million via a self-managed private placement, Variagenics Inc., filed to raise $100 million through an initial public offering (IPO).
The Cambridge, Mass.-based company intends to use the proceeds for general corporate purposes and research and development activities. It did not indicate how many shares would be offered, the price, or how many shares, if any, the underwriters will be granted to cover any overallotments.
This offering, along with Variagenics' other financial resources, should fund its operations for the next 18 months, the company said.
Credit Suisse First Boston Corp., of New York, is the lead underwriter. Co-managing the offering are Chase Securities Inc., and SG Cowen Securities Corp., both of New York.
Earlier in the month Variagenics raised $20 million to augment its research programs and infrastructure. At the time, Variagenics President and CEO Taylor Crouch admitted that, because of the current fascination with biotechnology firms by the financial community, the company was considering going public.
"It's a good market and there seems to be a lot of investors interested in our company and biotechnology in general," he told BioWorld Today at that time. (See BioWorld Today, March 9, 2000, p. 1.)
As of Dec. 31, the company had $4.3 million in cash. The company had revenues of $400,000 and a net loss of $16.7 million.
Among the largest institutional investors are: The Sprout Group, of Menlo Park, Calif., with a little more than 3 million shares; Atlas Venture, of Boston, with 1.8 million shares; Oxford Bioscience Partners, also of Boston, with 1.5 million shares; CIBC, of New York, with 1.7 million; Forward Ventures, of San Diego, with 1.25 million shares, and Kummell Investments of Gibraltar, with 1 million shares.
The company's focus is pharmacogenomics, the study of the correlation between an individual's genetic variability and his or her specific response to a drug. It identifies clinically important variances of single-nucleotide polymorphisms (SNPs) in genes that affect drug action and applies it to the discovery and development of new drugs.
Variagenics' proprietary SNP database is a collection of genetic variability data specific to pharmacogenomics and relevant to major drug targets in development, including targets for oncology, cardiovascular, central nervous system and inflammatory disorders. Currently the company has more than 18,000 SNPs in its database.
Its SNP detection is performed on DNA samples derived from an ethnically and geographically diverse panel of more than 100 individuals. This diversity provides Variagenics with a greater than 99 percent probability of detecting SNPs with a frequency in the population of 10 percent or greater, the company said.
It also has the rights to genes that have demonstrated pharmacogenomic effects. Some of those genes are: apolipoprotein E-4 (ApoE), for Alzheimer's disease; MTHFR, a risk factor for atherosclerosis; Thiopurine methyltransferase (TPMT), for cancer, transplantation and arthritis; deoxypyridinoline (DPD) for cancer, and ICAM-1 for Crohn's disease and inflammation.
Its Variagenic Impact Program family of technologies includes five complementary and proprietary discovery tools to identify the most critical genetic information to drug activity. The technologies filter and focus the tremendous volume of SNP and other genetic information into a usable amount of data suitable for clinical research validation, the prospectus said.
Founded in 1992, Variagenics' proposed NASDAQ ticker symbol is VGNX.