By Debbie Strickland
With the ink still moist on two collaborations worth upwards of $175 million, Gene Logic Inc. is seeking up to $36 million in an initial public offering (IPO) of 3 million shares expected to price between $10 and $12 each.
The underwriters — BancAmerica Robertson Stephens, of San Francisco, and Hambrecht & Quist L.L.C. and UBS Securities L.L.C., both of New York — have an overallotment option of 450,000 shares.
Collaborator Japan Tobacco Inc., of Osaka, Japan, will add $3 million to the pot in a private transaction, purchasing common shares at the IPO price.
At an assumed public offering price of $11 per share, Gene Logic would net a combined $33.1 million from the IPO and private placement with Japan Tobacco, plus an additional $4.6 million if the underwriters exercise the overallotment option.
After the offering, the three-year-old Columbia, Md., company will have 13.4 million shares outstanding. Gene Logic has requested a listing on the NASDAQ National Market under the symbol GLGC.
Combined with existing resources, the cash injection would be sufficient to carry the company for at least two years, according to the registration statement filed with the Securities and Exchange Commission. Proceeds have not been earmarked for specific projects.
Gene Logic currently has $24 million in cash and marketable securities, and recorded a net loss of $2.8 million in the first half of 1997.
The IPO attempt comes on the heels of a $20 million private placement executed in July and two blockbuster collaborations signed this summer: an up-to-$100 million deal with Japan Tobacco and a $75 million agreement with Proctor & Gamble Co., of Cincinnati.
The Proctor & Gamble collaboration centers on heart failure and two other, undisclosed diseases, while the Japan Tobacco research focuses on renal disease, with options to expand the alliance to include two additional disease areas. (See BioWorld Today, June 16, 1997, p. 1, and Sept. 10, 1997, p. 1.)
Internal drug discovery programs are exploring osteoporosis, cancer, central nervous system disorders and infectious disease.
Shooting Molecular Movies
Gene Logic analyzes patterns of gene expression using restriction enzyme analysis of differentially expressed sequences (READS) technology. Using READS, researchers create a molecular topography — a quantitative snapshot of the levels of expression of "essentially all" the genes expressed in a tissue sample.
By linking these snapshots of normal and diseased tissues over time, the company creates "molecular movies" that identify the changes in gene expression that occur as the disease develops and progresses to determine which genes are associated with the disease.
To evaluate the effects of compounds on the expression of disease-associated genes identified by READS, the company is creating a high-throughput analysis system.
A suite of five genomic database products is also in the offing for big pharma clients: the gene express normal database, a reference set of gene expression profiles in a variety of normal tissues; a database containing sequences for rarely expressed genes that are not available through public sources; the annotated genome database, which assigns human genes to functional pathways based on their patterns of expression and regulation; the pharmacology express database, to predict the efficacy of preclinical lead compounds; and the toxicology express database, for screening lead compounds for common toxicological effects. *