By Mary Welch
Beset by financial difficulties and unable to find a buyer, Progenitor Inc., which focused on genomics, ceased operations and will sell the company's assets.
Mark Bagnall, chief financial officer of Menlo Park, Calif.-based Progenitor, blamed "a combination of where the genomic industry is going — let's face it, you only see the really big deals going to the really big companies — and [the fact] that the financial market for biotechnology is so poor."
Progenitor was in serious talks with at least 10 companies, Bagnall told BioWorld Today. "We had a number of potential buyers who did considerable due diligence, and a number had gone to their boards," he said. "The boards turned the deals down."
With $4 million cash on hand, Progenitor decided to let go of most of its 50 employees and unload its assets. "We believe that companies would be more interested in taking on a one-time expenditure of $2 million to $5 million, which is what we're asking for our assets," Bagnall said.
The most expensive asset for sale is a database of 2,300 asthma patients who are fully genotyped. Letters describing the database were sent to 20 companies and Progenitor has "received a couple of calls back wanting more information," Bagnall said. The database is priced at $5 million.
Perhaps as valuable as the database, Bagnall said, is a discovery made by the six-year-old company: the del-1 gene, which may play a role in tumor angiogenesis.
"We think it's worth at least as much as the (asthma) database but what it's worth is what people are willing to pay," Bagnall said. "We think it's worth a lot, so we're asking a lot of money." The asking price has not been established, but is likely to equal the price of the database, he said.
Other assets on the selling block include Progenitor's gene therapy program; and libraries of angiogenesis genes and proprietary genomic technologies.
Fate Of Affymetrix Partnership Undetermined
Progenitor signed a deal with Affymetrix Inc., of Santa Clara, Calif., to identify the gene variations associated with asthma. In that agreement, Progenitor provided asthma genes for screening and Affymetrix designed custom DNA probe arrays. Bagnall said he hopes Affymetrix and Progenitor will "work a deal out" regarding the partnership's fate. (See BioWorld Today, Jan. 27, 1998, p. 1.)
Progenitor also is partnered with London-based SmithKline Beecham plc, through SmithKline Beecham Clinical Laboratories Inc., of Collegeville, Pa., for a genetic hemochromatosis test, launched this summer. (See BioWorld Today, Sept. 23, 1997, p. 1.)
Progenitor, a spin-off of Interneuron Pharmaceuticals Inc., of Lexington, Mass., registered for an initial public offering in June 1996. After 14 months of numerous postponements, it priced 2.75 million units at $7 each, for gross proceeds of $19.25 million. (See BioWorld Today, Aug. 8, 1997, p. 1.)
Nasdaq changed Progenitor's "trading halt" status for common stock and warrants to "additional information requested" from the company. Trading in both the common stock and the warrants had been halted early on Friday, the last sale price being $0.25 for the common stock and a last sale price at about $0.03 for warrants. Progenitor said it expects Nasdaq to begin delisting proceedings soon. *