By Randall Osborne

West Coast Editor

With plans to begin selling this year its microchip cartridge for analyzing test samples, Nanogen Inc. registered for an offering of 2.5 million shares.

Sale of the shares (NASDAQ:NGEN) would raise $151 million, if priced at Tuesday's closing of $60.375, which was down $7.31. After the offering, San Diego-based Nanogen would have 21.5 million shares outstanding.

Kieran Gallahue, senior vice president and chief financial officer, declined to comment, citing the Securities and Exchange Commission's "quiet period" rule.

An overallotment option for underwriters provides for up to another 375,000 shares to be sold. Of this number, as many as 145,355 shares may be sold by the company, and up to 229,645 by selling stockholders. Managing the offering are Warburg Dillon Read LLC; Lehman Brothers Inc.; Pacific Growth Equities Inc.; Dain Rauscher Inc.; and First Union Securities Inc.

Nanogen's technology, called NanoChip, uses automated instruments and a cartridge to analyze samples that contain charged molecules.

The company, which says NanoChip offers a "new standard" for single nucleotide polymorphism scoring, intends to market the technology to scientists and genomics labs. NanoChip uses electronically accelerated hybridization under very low salt conditions, thereby avoiding problems of other sequencing and primer extension technologies, which require high salt conditions.

Last fall, Nanogen expanded its collaboration with Aventis Research & Technologies GmbH Co. in a deal that could mean $12 million to Nanogen. The collaboration initially was with Hoechst AG, of Frankfurt, Germany, before its merger with Rhone-Poulenc S.A. to form Aventis. (See BioWorld Today, Sept. 29, 1999, p. 1.)

The Hoechst agreement first focused on combining Nanogen's electronic array technology with Aventis' pRNA and Exponential Library by Association of Sublibraries. In the broader collaboration, the firms are developing a method for using electronic bioarrays to speed differential gene expression studies, and they are working on a high-throughput screening tool for kinase analysis using electronics.

Nanogen also has a joint venture with Becton Dickinson & Co., of Franklin Lakes, N.J., begun in October 1997 to identify disease-causing microbes and determine how they react to antibiotics.

In January, Nanogen signed an agreement with Japan-based Hitachi Instruments Co. for manufacturing and further development of the NanoChip.

For the year ended Dec. 31, Nanogen's revenues totaled $8.1 million, as compared to $7.6 million for the same period in 1998, with a net loss of $25.2 million, or $1.39 per diluted share, compared to a net loss of $20.9 million, or $1.60 per diluted share, for the same period in 1998.

The company went public almost two years ago, with an initial public offering that raised about $64 million. (See BioWorld Today, April 15, 1998, p. 1.)