By Mary Welch
Genome Therapeutics Corp. (GTC), which develops genomic-based therapeutics, registered for a public offering of 3 million shares it estimated would bring in $103.5 million.
That estimate was based on a price of $36.875 per share. The stock (NASDAQ:GENE) closed Thursday at $33.187, down $3.687.
The Waltham, Mass.-based company intends to use the proceeds to fund research and development activities, including its emerging pharmacogenomic and infectious disease programs. The proceeds should last the company at least 24 months, the prospectus said.
GTC granted the underwriters another 450,000 shares to cover overallotments. CIBC World Markets Corp. is the lead managing underwriter, and Warburg Dillon Read, of New York, Dain Rauscher Wessels, of Minneapolis, and Tucker Anthony Clearly Gull Inc., of Boston, are co-managers. After the offering, the company will have 23.5 million shares outstanding.
Part of the funds will go toward building GTC¿s pharmacogenomics program and increasing its infectious disease work. In the pharmacogenomics area, GTC intends to form alliances with pharmaceutical and biotechnology companies to use its integrated technology platform to detect genetic variations that affect individual drug responses. The platform will allow GTC to both select the best leads for drug development and to ¿rescue¿ drugs that have foundered, the prospectus said.
In the area of infectious disease, the company plans to move further down the drug development process toward identifying and validating compounds internally by pursuing leads for novel drugs based upon the results of its genomics research.
The company¿s commercial gene strategy is to identify and characterize human genes associated with major diseases and elucidate those bacterial genes responsible for the infectious diseases.
The company has six exclusive genomic alliances ¿ four in pathogen genomics and two in human genomics. Late last year it entered into a deal with bioMerieux SA, of Lyon, France, for infectious disease diagnostics, and a second one worth potentially $118 million with Wyeth-Ayerst Laboratories, of Radnor, Pa., for osteoporosis. The company also has several deals with Schering-Plough Corp., of Madison, N.J., including one for $67 million for asthma, $33 million for antifungals and $43.5 million for drug-resistant bacteria. (See BioWorld Today, Dec. 23, 1999, p. 1; and Dec. 26, 1996, Special News Bulletin.)
Overall, the company is concentrating its product discovery efforts in two areas: human diseases believed to have a significant genetic component and infectious diseases caused by pathogens, including bacteria and fungi.
In addition to its U.S. government-sponsored sequencing services, the company also provides customized sequencing services to clients. Since launching the GTC Sequencing Center last July, GTC has gained sequencing contracts with 13 commercial, government and research customers.
The first commercial partner in the effort to sequence the human genome by 2003, GTC reported fiscal year 1999 revenues of $24 million and a net loss of $6.3 million. The company¿s fiscal year ended Aug. 31, and the company had $25 million in cash at that time.
However, when the company reported its first-quarter fiscal 2000 results, GTC had $30 million in cash, largely as a result of its alliance with bioMeriuex that provided for $6.2 million in first-year funding and a $3.75 million equity investment.