LONDON — Oxford GlycoSciences plc (OGS) has become the third U.K. company this year to announce plans to join the London Stock Exchange (LSE). Although the price is yet to be decided, the drug discovery and development company, which specializes in proteomics, aims to raise around £30 million, valuing the business at around £100 million.
OGS, of Abingdon, U.K., was founded in 1988 by Ray Dwek and Raj Parekh, both academics at Oxford University. The university retains a small stake in the company, which has raised £30 million from private equity placings since 1995. OGS had £11.1 million in cash as of December 1997 and a burn rate of around £11 million per annum.
Since then it has done a deal with Incyte Pharmaceuticals Inc., under which the two will collaborate in the marketing of OGS' proteomics database products. Incyte, of Palo Alto, Calif., took a 4 percent stake in OGS at a cost of US$5 million.
Dresdner Kleinwort Benson is the sponsor and Cazenove and Co. is the broker for OGS' flotation. Current shareholders include Warburg Pincus, Biotechnology Investments Ltd., Atlas Venture and Sofinnova.
Commenting on the timing of the flotation, Paul Triniman, finance director, told BioWorld International, "We had a very successful private placing round last year, so we are in a good position, with money in the bank. We will go when we are ready, but obviously, having started the process by appointing sponsors, we would like to complete the flotation sooner rather than later."
Triniman is not perturbed that two other companies, Oxford Asymmetry, of Abingdon, and Quadrant Healthcare, of Cambridge, U.K., are also seeking a full listing on the LSE at a time when the market for biotechnology stocks is depressed.
"I wish them every success; it's not good to see an [initial public offering] fail," Triniman said. "I believe the market will judge each approach on its own merits. Financial markets are affected by lots of factors, and while being less than jubilant, things just now are by no means as quiet as the fourth quarter of last year.
"There are," Triniman continued, "a number of good causes we could direct the money towards." OGS wants to expand its proteomics operation, allowing it to generate income and lessen risk.
The company's proteomics technology, in which disease-specific proteins are linked to the genes which encode them, is based on its proprietary ProteoGraph system and its bioinformatics software, Rosetta. "We won't outlicense the technology because it is unique," Triniman said, "but we want to see an expansion of deals through our agreement with Incyte, and to work in collaboration with third parties."
OGS Also Developing Drugs
Under the deal with Incyte, the two will develop and commercialize proteomics databases for human, animal, plant and microbial organisms. In addition, OGS and Incyte intend to develop proteomics databases on behalf of third parties.
Incyte currently has 20 pharmaceutical companies subscribing to its databases. Profits will be shared and the partners will co-own intellectual property. OGS also will get access to Incyte's genome database products for use in its internal drug discovery program.
OGS has two compounds in clinical trials, OGT 719, in Phase I for the treatment of primary liver cancer and secondary colorectal metastases, and OGT 918, in Phase I/II for the treatment of Gaucher's disease.
"We are running as fast as we can on these two trials already, so more money wouldn't help here. Instead, we want to use some of the new funds to develop our own internal targets and expand the portfolio," said Triniman.