By Lisa Seachrist
WASHINGTON — Gene therapy specialist Transgene SA raised $57 million in an initial public offering (IPO) that simultaneously listed the French company on Nasdaq and France's Nouveau Marche.
As the largest biotechnology IPO this year, the company completed the offering at the top end of its range and gained 30 percent in heavy trading in its market debut last Thursday. The success of the offering led Nasdaq to issue a press release highlighting the company's efforts.
Transgene sold 1.314 million Ordinary Shares, also offered as American Depositary Shares (ADS) in the U.S., with each ADS representing one-third of an Ordinary Share.
The offering priced at the top end of the projected range, garnering $14.50 (FFr88.83) per ADS or $43.50 (FFr266.48) per Ordinary Share.
Transgene's stock (NASDAQ:TRGNY) soared upon its debut to close Thursday at $18.75. On Friday, the shares fell back, dropping $2.187 to $16.562.
The offering was underwritten by U.S. and international banking organizations. In the U.S., Lehman Brothers, Credit Suisse First Boston and BancAmerica Robertson Stephens, all of New York, managed the offering. Lehman Brothers, Credit Suisse First Boston, BancAmerica Robertson Stephens International, Credit Lyonnais and Lazard Capital Markets managed the offering internationally.
The company provided underwriters the option to purchase 197,100 Ordinary Shares.
As detailed in a March 2 agreement, Human Genome Sciences Inc. (HGS) of Gaithersburg, Md., purchased a 10 percent interest in Transgene, which is a subsidiary of the French group bioMerieux SA, of Lyon. Under the terms of that agreement, Transgene will pay HGS licensing and research-and-development fees equal to the amount the company paid for the shares. HGS now holds a $25 million equity interest in Transgene. Should the overallotment be exercised, HGS will receive additional stock to equal 10 percent of the shares purchased.
Transgene intends to use the proceeds of the offering for research and development, capital expenditures and general corporate purposes. The company ended 1997 with approximately $15 million or FFr93.3 million in cash. The success of the offering should allow the company to fund the expected increases in research and development costs for the next few years.
Transgene's focus is development of gene therapy technologies and products for the treatment of a wide variety of diseases. The company has developed adenoviral, vaccinia viral, retroviral, cellular and synthetic vectors for gene therapy. Two of the firm's in vivo cancer therapies have shown promising results in Phase I trials.
Transgene has a non-specific immunotherapy using monkey Vero cells to deliver the cytokine interleukin-2 (IL-2) in Phase II trials for melanoma and other solid tumors. This year, Phase II trials in breast, prostate and other cancers are expected to commence for a gene therapy delivering IL-2 via the vaccinia virus MUC1.
The HGS deal is a 10-year enterprise for the companies to collaborate on the identification of new genes of potential interest for gene therapy using HGS' database of human gene sequences. Transgene will make milestone payments to HGS as well as paying for genes it licenses and paying royalties should any products arise from the collaboration.
Transgene also has a deal with Schering-Plough to develop an adenoviral system to deliver the p53 tumor suppressor gene. Schering made an upfront payment of $8 million to Transgene and could make further payments totaling $80 million over the term of the five year agreement. *