By Lisa Seachrist

Washington Editor

In November, Sequenom Inc. was looking to raise $70 million in an initial public offering of common stock. At that time, the San Diego-based industrial genomics specialist declined to detail the number of shares it intended to sell or the asking price.

Commencing the offering Tuesday, Sequenom raised $137 million by selling 5.25 million shares of common stock at a price of $26 a share. In its first day of trading, Sequenom stock (NASDAQ:SQNM) soared 204 percent, closing Tuesday at $79.25, up $53.25.

The offering is being managed by New York-based Warburg Dillon Read LLC, the lead underwriter, and BancBoston Robertson Stephens and SG Cowen Securities Corp., both of New York. The underwriters have been granted a 30-day overallotment option to purchase up to 787,500 additional shares at $26 per share. Should the underwriters fully exercise that option, the total for this offering will top out at $157.48 million.

The offering continues a trend of impressive IPOs for genomics-based biotechnology companies. In December, Maxygen Inc. garnered $110 million in its IPO. Maxygen's target markets include protein pharmaceuticals, preventative and therapeutic vaccines, chemicals and agriculture.

Sequenom is under an SEC-imposed quiet period and was unavailable for comment on the offering.

However, according to the prospectus filed in conjunction with the offering, Sequenom intends to use the money raised to hire additional sales and customer support staff for its expanding single nucleotide polymorphism (SNP) genotyping business. In addition, the company will use the money to expand its facilities, develop new products and retire a long-term debt and accrued interest totaling $4.2 million.

Sequenom is aiming to be a significant player in the burgeoning SNP genotyping market. These single-base variations in genes are thought to be the origin of differing drug responses and disease predispositions among individuals.

Pharmaceutical companies are becoming increasingly interested in sorting out which patients are likely to achieve benefits of a drug without suffering its side effects in order to conduct clinical tests of new drugs. In addition, SNPs are expected to be vital to DNA diagnostics, drug discovery, seed development and livestock breeding.

Current methods for SNP analysis tend to be inaccurate, non-automated, inflexible, slow and expensive. Sequenom is looking to sidestep such pitfalls by directly analyzing SNPs using mass spectrometry in its MassArray system. The system combines a miniaturized chip technology with high-fidelity enzymatic procedures and mass spectrometry.

The company views its DNA MassArray Automated Process Line as a means to bridge the gap between basic genetics information and the need to choose an economically viable product development path by quickly identifying which genomic targets or genes are suitable candidates for further study. The system, which is designed to be operated around the clock, can analyze up to 10,000 genotypes per day.

Those testing the MassArray system include Genzyme Corp., of Cambridge, Mass.; the U.S. Dept. of Agriculture in Beltsville, Md.; the National Institutes of Health and the National Cancer Institute in Bethesda, Md.; The University of Munster in Germany; and GLE Medicon in Germany. Sequenom completed the commercial launch of MassArray in the fourth quarter of 1999.

The company also is in the process of developing proprietary disposable SNP tests, called assays, and software products that are useful initially as research tools to confirm the association of particular SNPs with certain diseases and subsequently as diagnostic kits for SNP profiling.