By Mary Welch

The initial public offering fever for biotechnology continued to rise with two more companies catching the bug, as ViroLogic Inc. filed for an IPO to raise about $75 million and Signal Pharmaceuticals Inc. filed to raise $70 million.

With these two filings, the number of biotechnology IPOs filed this year in North America reached 20, which together would total more than $1.75 billion. In addition, three other companies have closed their IPOs this year, bringing the total amount raised or expected to be raised in IPOs this year to $2.1 billion. By contrast, only 12 North American biotech companies completed initial public offerings in all of 1999.

Neither ViroLogic nor Signal indicated how many shares would be sold or at what price.

San Diego-based Signal will use the proceeds for research and development as well as to acquire new technologies, compound libraries and product rights. Signal focuses on developing new classes of small-molecule drugs that regulate genes associated with disease, particularly in the areas of cancer, inflammatory disease, osteoporosis, cardiovascular and neurological diseases and viral infections.

The offering is being managed by FleetBoston Robertson Stephens, Chase H&Q and CIBC World Markets Corp., all of New York.

Signal has advanced drug discovery programs in six major disease areas and has explored and mapped 10 gene-regulating pathways to identify the crucial gene switches that control disease. In addition, it has identified 27 drug targets that may be important to disease, and assembled a screening library of more than 300,000 distinct small-molecule compounds and natural products.

Its lead drug candidate, SP8490, is in preclinical studies for breast cancer. Another drug, NSP6783, is aimed at preventing or treating newer damage caused by cancer chemotherapy and is in preclinical trials. Signal intends to file an investigational new drug application for both candidates this year.

Incorporated in 1992, Signal had $9.4 million in cash as of Dec. 31. It posted 1999 revenues of $11.7 million with a net loss of $7.9 million.

Ares-Serono S.A., of Geneva, Switzerland, is the primary stockholder with 1.8 million shares, followed by Venrock Associates, of New York, with 1.48 million shares and Accel Partners, of Palo Alto, Calif., with 1.46 million shares. As of Jan. 31, there were 14.1 million shares outstanding.

Signal first filed to go public in 1998, seeking to raise about $30 million; however, market conditions forced withdrawal of the IPO. Its proposed Nasdaq symbol is SGNL.

The company has several partnerships, including a $25 million deal with DuPont Merck Pharmaceutical Co., of Wilmington, Del., to develop drugs that inhibit the gene-regulating targets of the hepatitis C virus and HIV. It also snagged a $59 million deal with Ares-Serono to identify small-molecule inhibitors of the NF-KkB gene regulation pathway. (See BioWorld Today, May 20, 1998, p. 1; Jan. 13, 1998, p. 1; and Dec. 3, 1999, p. 1.)

South San Francisco-based ViroLogic, which develops products to improve the treatment of viral diseases, will use the proceeds for sales and marketing and capital expenditures, including the expansion of its clinical laboratory capabilities.

CIBC World Markets Corp., of New York, is the lead manager, with ING Barings LLC and Prudential Vector Healthcare Group, both of New York, serving as co-managers.

ViroLogic's first marketed product is PhenoSense HIV, a test that measures HIV resistance to antiviral drugs. The test evaluates the susceptibility of HIV in an infected individual to each of the 11 FDA-approved antiretroviral drugs, as well as to drug candidates. Launched in November, the test helps physicians in selecting appropriate drugs for HIV patients. The company is also developing PhenoSense for other viral diseases, including hepatitis B and hepatitis C.

Another approved test is GeneSeq HIV, a genotypic test that identifies mutations associated with drug resistance.

Founded in 1995, the company had $2.2 million in cash as of Dec. 31. At that time, it reported 1999 revenues of $1.1 million, and a net loss of $16 million.

As of Feb. 22, the company had 14.6 million shares of common stock outstanding. The largest shareholder is Biotech Growth S.A., which owns 25.6 percent of the company, followed by Zesiger Capital Group, of New York, with 18.2 percent and Daniel Capon with 12.1 percent. Biotech Growth S.A. is a fully owned subsidiary of BB Biotech A.G., of Cambridge, Mass. Capon, of Hillsborough, Calif., is the company's chairman emeritus.

ViroLogic's proposed Nasdaq symbol is VLGC.