By Vicki Brower
Special To BioWorld Today
Two genomics companies, Affymetrix Inc. and Vysis Inc., have made bids to raise funds — Affymetrix in a public offering of 1.5 million shares for a potential $61 million and Vysis Inc. through an initial public offering (IPO) of 3.5 million shares for a projected $49 million.
Vysis, of Downer's Grove, Ill., is a genomics diagnostics company that currently markets four clinical products in the U.S. and distributes over 240 research products in the U.S. and Europe, as well as marketing a line of genetic instrumentation workstations.
Its IPO is being underwritten by Furman Selz L.L.C., of New York, Deutsche Morgan Grenfell, of Toronto, and EVEREN Securities, of Chicago. The projected price range is $13 to $15. At an assumed price of $14 per share, Vysis would generate $49 million. The underwriters have overallotment options for another 525,000 shares.
After the offering — which includes 4.65 million shares issuable upon conversion of preferred stock to Amoco Technology Co., of Chicago, Vysis will have about 9.5 million shares outstanding. Over the past 10 years Amoco has invested more than $80 million to fund Vysis' research and development in nucleic acid technologies. Amoco will own 63 percent of Vysis upon completion of the IPO.
Vysis also has an ongoing collaboration with Incyte Pharmaceuticals Inc., of Palo Alto, Calif., for genomic mapping of disease-related genes.
In its IPO prospectus, Vysis reported $171,000 in cash and a net loss of $7.63 million for the first six months of 1997.
With funds from the offering, Vysis plans to accelerate product development, expand its sales and marketing capability, and acquire complementary technologies. It currently has a pipeline of nine clinical products under development and product collaborations with a number of medical research institutions, including the University of Chicago and the University of California, San Francisco.
It is focusing its oncology product development efforts on leukemia and breast, bladder, prostate and cervical cancers. Its first breast cancer product, now in late-stage clinical trials, is for the detection of HER-2/neu gene amplification.
Vysis' DNA-based diagnostic products use three complementary technologies: fluorescence in situ hybridization, or "FISH," which detects chromosomal abnormalities; the gCGH (comparative genomic hybridization) Array System, which detects gene defects within chromosomes; and the Molecular Lawn System, which zeroes in on specific gene sequence mutations.
Three of Vysis' FISH system products for leukemia and other myeloid disorders are currently cleared for clinical diagnostic use in the U.S., and one for prenatal testing is registered and marketed in France. Vysis has requested a listing on NASDAQ under "VYSI."
Affymetrix GeneChip Analyzes Gene Expression
Affymetrix's public offering of 1.5 million shares is being underwritten by Goldman, Sachs & Co. and Credit Suisse First Boston, of New York, and BancAmerica Robertson Stephens and Nationsbanc Montgomery Securities, of San Francisco. They have options to buy up to 225,000 shares to cover overallotments.
Of the 1.5 million shares, 1.2 million will be offered in the U.S. and 300,000 will be offered overseas. Based on Affymetrix's closing price Monday of $41.125, the company could raise $61.7 million. The company's stock (NASDAQ: AFFX) closed Tuesday at $40.875, down $0.25. After the offering, Affymetrix will have 24.2 million shares outstanding.
Proceeds of the offering will be used to broadly commercialize applications of the company's GeneChip technology for monitoring gene expression and resequencing particular genes, as well as for manufacturing and expansion of research and development facilities.
Affymetrix uses its GeneChip technology for genomics, disease management and polymorphism discovery.
Specifically, the company targets GeneChip expression monitoring applications for use in identifying and validating novel targets for drug discovery. In disease management, it is developing assays for cancer, infectious diseases and drug metabolism. Polymorphism discovery involves a large-scale research project to identify common variations in the human genome, create databases of them, and design GeneChip arrays for their analysis.
This year Affymetrix joined a consortium with Bristol-Myers Squibb Co., of New York, and Millennium Pharmaceuticals Inc., of Cambridge, Mass., to fund research at the Whitehead Institute for Genomic Research at Massachusetts Institute of Technology, in Cambridge.
Affymetrix has established alliances with Genetics Institute Inc., of Cambridge, Mass., a subsidiary of American Home Products Corp., of Madison, N.J.; Glaxo Wellcome P.L.C., of London; Hoechst Marion Roussel, of Frankfurt, Germany; Merck & Co., of Whitehouse Station, N.J.; Warner-Lambert Co., of Morris Plains, N.J.; Pfizer Inc., of New York; Roche Holding Ltd., of Basel, Switzerland; and Pioneer Hi-Bred International Inc., of Des Moines, Iowa.
Other partnerships involve bioMerieux Vitek Inc., of Hazelwood, Mo. and OncorMed Inc., of Gaithersburg, Md.
Last week, Affymetrix agreed to collaborate on developing a new GeneChip with OncorMed for genotyping the BRCA1 and BRCA2 genes. (See BioWorld Today, Oct. 20, 1997 p. 3.) The two companies are currently completing their p53 GeneChip assay project.
A few months earlier, in late August, Affymetrix entered into a $15 million GeneChip deal with Roche, in which the Swiss company became the first subscriber to the EasyAccess program, which involves access to custom and standard GeneChip expression arrays as well as to GeneChip instrumentation for simultaneous monitoring of the expression of thousands of genes. (See BioWorld Today, August 27, 1997, p. 1).
Another deal with Glaxo Wellcome, for analyzing HIV drug resistance, was forged in January of this year. (See BioWorld Today, Jan. 28, 1997, p. 1)
As of June 30, Affymetrix had $94.64 million in cash and reported a net loss of $10.13 million for the six months of 1997. *