By Mary Welch
Invitrogen Corp. braved chilly market waters and jumped into the public-financing pool, filing for an initial public offering (IPO) of 3 million shares of common stock, which — at the proposed maximum price of $15 per share — would raise $45 million for the company.
The Carlsbad, Calif.-based company was in a quiet period as required by the Securities and Exchange Commission, and could not comment on the offering, said James Glynn, chief financial officer.
David Stone, an analyst with S.G. Cowen Securities Corp., in Boston, saw no "concrete evidence that an IPO would not be well received, whether it's Invitrogen or another stock. I'm talking generally. It's not infrequently that, come the turn of the new year, analysts and the market are in a different frame of mind. Invitrogen may be filing so as to be positioned for this positive investment sentiment."
Stone said January and February of some years are favorable for public offerings.
"By the end of February, the window [of opportunity] closes," Stone said.
"It's always dangerous to talk about transactions just announced and the market in general," he added. "While large-cap [biotechnology] stocks have performed well, the small-cap ones — which are the majority — have performed dismally."
Invitrogen, which develops, manufactures and sells products and provides services for molecular biology research, plans to use the proceeds of the offering to redeem outstanding preferred stock; redeem the common stock of its subsidiary Invitrogen BV, of Groningen, the Netherlands; and proceed with product development.
For the first nine months of 1998, Invitrogen's revenues were $22.9 million, up from $18.2 million for the same period in 1997. Operating expenses for the period in 1998 totaled $13.4 million, up from $9.4 million for the first nine months of 1997. Cash and cash equivalents totaled $32.7 million as of Sept. 30.
Division Aims At Genomics Field
The company, which now has 225 employees, markets in more than 30 countries, with international revenues accounting for more than one-third of all product revenues.
In August, Invitrogen launched the human version of its GeneStorm product line, with more than 500 expression-ready human gene clones available. Invitrogen provides the human genes in a mammalian expression vector, ready for use in experimentation. All of the constructs have been tested to show that they produce the proteins that they code for, and all come with the full sequence. The product is designed to facilitate the drug discovery efforts of biotechnology and pharmaceutical companies, as well as academic research activities. (See BioWorld Today, Aug. 12, 1998, p. 1.)
Earlier this year, Invitrogen established a new division for functional genomic studies that it expects will add $20 million to its bottom line by the end of next year. The division, Invitrogenomics, will apply the gene cloning and expression technologies that it sells to research scientists and will jump into the genomics field itself. The company, along with collaborative partners, intends to use its technology for drug discovery, diagnostic development and crop enhancement purposes. (See BioWorld Today, June 11, 1998, p. 1.)
Invitrogen's proposed NASDAQ symbol is IVGN. Lead manager of the offering will Donaldson, Lufkin & Jenrette, of New York, and co-managed by NationsBanc Montgomery Securities LLC, of San Francisco; and Warburg Dillon Read LLC, of New York. *