By Karen Pihl-Carey

Maxygen Inc. plans to raise $65 million in an initial public offering of 5 million shares to pay for research and development and to fund investments and possible acquisitions.

The company originally filed for the IPO in late October with a goal to raise $80.5 million, but it submitted an amended filing in late November, stating it planned to offer the shares at $13 apiece.

The Redwood City, Calif.-based company also registered for an additional 750,000 shares for underwriter overallotment options. Underwriters include Goldman, Sachs & Co., BancBoston Robertson Stephens Inc. and Invemed Associates Inc., all of New York. If they exercise the overallotment option, the company will raise an additional $9.75 million, bringing the total raised to $74.75 million.

Maxygen applied for quotation of the common stock on the Nasdaq National Market under the symbol, MAXY. The company will have 28.9 million shares outstanding following the offering.

Net proceeds from the IPO, along with income from collaborations and grants, will carry the company through at least the next two years, Maxygen said in a filing with the SEC. As of Sept. 30, Maxygen had cash and cash equivalents of $36.12 million.

The company, which was founded in May 1996 and employs 125 people, intends to use the IPO proceeds for research and development activities, and for capital expenditures to finance possible acquisitions and investments in technology, as well as working capital and other general corporate purposes.

Maxygen focuses on its proprietary technology, called MolecularBreeding, which brings together advances in molecular biology and classical breeding. The technologies consist of DNAShuffling recombination technologies and MaxyScan screening systems. With 15 U.S. patents, 10 of which are in-licensed, the company is conducting research on more than 35 product candidates for the chemical, agricultural and pharmaceutical industries.

The company is applying its technologies to potentially increase crop yield and quality, and it is developing products for multiple forms of cancer, infectious diseases, such as HIV and hepatitis, and autoimmune diseases, such as rheumatoid arthritis and multiple sclerosis.

In August, Maxygen signed a five-year research deal with Zeneca Agrochemicals, of London, to develop input and output traits for several crops. The deal is potentially worth more than $125 million. (See BioWorld Today, Aug. 12, 1999, p. 1.)

The company made an $85 million deal earlier in the year with Pioneer Hi-Bred International Inc., of Des Moines, Iowa, to accelerate the development of advanced crop genetics in corn, soybeans and other crops. (See BioWorld Today, Jan. 26, 1999, p. 1.)

Maxygen also has a collaboration with Novo Nordisk AS, of Bagsvaerd, Denmark, in the area of industrial enzymes, and one with DSM Anti-Infectives, of Delft, the Netherlands, to improve manufacturing of certain classes of penicillin.

Committed funding from the collaborations and grants from government agencies totals more than $94 million, and Maxygen could receive an additional $145 million in milestone payments, as well as royalties on product sales.

Maxygen incurred a net loss of about $6.1 million for the nine months ended Sept. 30. The company has an accumulated deficit of about $14 million.

In the SEC filing, the company said it plans to continue to develop its MolecularBreeding technologies and to establish strategic collaborations, while retaining significant rights to develop and market product applications that come out of the collaborations.