By Mary Welch

Ciphergen Biosystems Inc., which developed and markets a ProteinChip System for protein discovery, characterization and assay development, filed for an initial public offering (IPO) to raise $86.25 million.

The company, based in Palo Alto, Calif., will use the proceeds for research and development activities, including the establishment of Biomarker Discovery Centers, and the expansion of its sales and marketing capabilities. The company expects the proceeds to last at least two years.

SG Cowen Securities Corp., of New York, is the lead underwriter, with ING Barings LLC and Warburg Dillon Read LLC, both of New York, serving as co-underwriters. The number of shares for the underwriters' overallotment was not disclosed. As of Thursday, there were 16.46 million shares outstanding.

Last week the company raised $28.6 million in a Series E financing aimed at helping expand the sales and marketing of its ProteinChip System. The company sold 10.4 million shares to both new and existing investors, including Atlas Venture, of Boston; Morgan Stanley Venture Partners, of New York; MDS Capital Corp., of Toronto; SR One Ltd., of Wayne, Pa.; and Essex Venture Partners LP, of Houston. (See BioWorld Today, March 20, 2000, p. 1.)

Part of the proceeds will be used to establish Biomarker Discovery Centers, whose purpose is to help market its products and technology either directly or through partnerships. The centers may accelerate biomarker discovery and validation in drug discovery, toxicology and clinical trials as well as in clinical research and diagnostic laboratories, the prospectus said. Currently the company has leased facilities for its centers in Copenhagen, Denmark, and Fremont, Calif.

The ProteinChip System is an enabling tool that integrates the key steps of proteomics research on a single, miniaturized biochip platform. Proteomics provides a direct approach to understanding the role of proteins in the biology of disease, monitoring disease progression and the therapeutic effects of drugs. The system consists of three components: disposable ProteinChip Arrays, a ProteinChip Reader and ProteinChip software.

The system is based on the surface-enhanced laser desorption/ionization (SELDI) technology. SELDI allows proteins to be captured, separated and quantitatively analyzed directly on-chip.

The ProteinChip System, Series PBS II, was launched in May, and the company expects to introduce a new system this year that will encourage pharmaceutical companies to take advantage of biomarker discovery, characterization and assay services. (See BioWorld Today, May 25, 1999, p. 1.)

Founded in late 1993, Ciphergen posted 1999 revenues of $5 million and a net loss of $7.7 million. The company had $2.7 million in cash as of Dec. 31.

Among the company's largest institutional investors are Falcon Technology Partners, of Devon, Pa., SR One and Atlas Venture.

The proposed Nasdaq ticker symbol is CIPH.

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