By Mary Welch

NetGenics Inc. raised $21.3 million in equity financing that will be used to further develop its bioinformatics products.

"We raised more than we thought," said Manuel Glynias, president and CEO of Cleveland-based NetGenics. "It's hard to turn money down. I think the market was interested because of the quality of our partners and products as well as the fact that biotechnology is now interesting again to investors. I think it's a combination of what we did and what the market is doing."

Muzinich & Co. Inc., of New York, served as the placement agent and also invested. Dresdner Kleinwort Benson, of London, led the financing. Other investors included Lombard Odier & Cie, of Zurich, Switzerland, and Kecalp Inc., an affiliate of New York-based Merrill Lynch & Co. Previous investors who participated this round included OrbiMed Advisors LLC, of New York; WPG-Farber Present Fund LP, of New York; and Crystal Internet Venture Fund, of Cleveland.

Privately held NetGenics intends to use the money to develop a new generation of Synergy, a distributed computing environment that integrates legacy, third-party and proprietary data and software. A computing framework, Synergy can be adapted to address a customer's bioinformatics needs by integrating their choice of tools and data sources. Synergy also provides the technical foundation for an evolving set of integrated bioinformatics components. These applications include Synergy Sequence Analysis and the recently released Synergy Gene Expression.

A second use of the proceeds will be to further develop another product for integrating drug discovery data. The second project, "a massive integration tool," has been installed for an undisclosed partner but NetGenics hopes to further expand and develop it for pharmaceutical companies and then market it, he said.

"We will be working on those two projects as well as generally expanding our operations," Glynias said. "We'll be hiring about 50 new people this year."

The company's last financing was a $17.7 million round in 1998. It raised $6.5 million in 1997. (See BioWorld Today, March 28, 1998, p. 1.)