By Lisa Seachrist
Assay and drug discovery specialist LJL Biosystems Inc.'s stock remained steady Monday after the company went public Friday, raising $14 million in a sale of 2 million shares of common stock at $7 per share.
The Sunnyvale, Calif.-based company's stock (NASDAQ: LJLB) closed at $7.062 up $0.062 from Friday.
The offering priced significantly lower than proposed in the Feb. 6, 1998, prospectus filed with the Securities and Exchange Commission. The company expected to sell 2.5 million shares at an initial public offering (IPO) price of $11 to $13. On March 10, LJL amended the offering and reduced the price range to between $9 and $11.
The company Thursday again lowered its estimate, to a range between $7 and $8, and dropped the shares offered from 2.5 million to 2.0 million. The IPO was completed Friday.
The offering was managed by NationsBanc Mont-
gomery Securities LLC, Hambrecht & Quist LLC and Volpe Brown Whelan & Co. LLC, all of New York. The underwriters have an overallotment option to purchase another 300,000 shares.
LJL intends to use proceeds of the offering to spur development of its drug discovery technologies ($5 million) and for investments in manufacturing, sales, marketing and administrative infrastructure ($4 million).
In the second half of 1996, the company decided to turn away from its focus on developing and manufacturing clinical diagnostic and research products on an original equipment manufacturing basis. At that time, LJL decided to concentrate on developing products to accelerate and enhance the drug discovery process.
As a result of the shift in business plan, total revenues decreased by $4.1 million in 1997, and costs associated with research and development increased by $1.1 million in the same year.
At the end of 1997, LJL had cash and cash equivalents of $5.5 million and an accumulated deficit of $3.8 million.
LJL's lead technology is Analyst, a proprietary four-mode analyzer designed to accommodate high-throughput screening efforts common in assessing compound libraries for drug candidates. The technology is currently undergoing beta testing at three pharmaceutical companies and two biotechnology companies. LJL expects to begin selling the product in the second half of 1998.
In addition, the company intends to develop a series of reagents and assay kits to be used with the Analyst technology.
LJL also has licensed FLARe -- a platform of patented, fluorescence-based bioassay technologies for use in commercial pharmaceutical and biopharmaceutical research and development -- from FluorRx Inc.
FLARe limits the effect of background signal and extends the lifetime of signal for fluorescent assays. The company intends to develop FLARe as a single-step assay for most human drug targets, including receptors, ion channels, cell regulatory pathways, gene regulatory elements and enzymes. *