With its sequencing system expected to start serving big pharma partners by early 1998, Lynx Therapeutics Inc. has completed its largest financing to date, a $26.8 million private placement at $10 per share.
The infusion boosts five-fold the Hayward, Calif., company's cash-and-equivalents, which stood at $6.7 million on June 30, following a net loss of $4.7 million in the first half of the year.
The common stock placement was managed by Punk, Ziegel and Co., of New York, and led by the WPG Farber-Weber Fund, also of New York. Participants included Mehta and Isaly, of New York; Lombard Odier Zurich, of Zurich Switzerland; INVESCO Trust Co., of Denver; Hambrecht & Quist Capital Management, of Boston; and Partech International, of San Francisco and Paris.
Now at 12.4 million (fully diluted) shares outstanding, LYNX's stock trades over the counter (LYXT), but "in due course" will move to one of the major exchanges, said Sam Eletr, chairman and CEO.
Lynx will use the proceeds to complete and add capacity to its massively parallel signature sequencing system (MPSS), which was recently applied, for the first time, to a real biological system.
"These results showed that, even in its very early stages of development, Lynx's technology may well enable the identification of unknown genes as well as uncover otherwise inaccessible details of gene expression," Eletr said.
Under development since 1994, MPSS aims to identify, simultaneously, short signature sequences from as many as 1 million or more DNA molecules or fragments present in a sample.
The system can be used for gene identification, gene expression profiling, pathogenic genome sequencing and very high resolution genomic mapping. Lynx's business plan calls for generating revenues through collaborations and building up internal databases to be made available in the future.
Two German companies have signed on as partners for MPSS: BASF, of Ludwigshafen, and Hoechst Marion Roussel, of Frankfurt.
Lynx and BASF in October 1996 formed a joint venture — BASF-LYNX Bioscience A.G., based in Heidelberg, Germany. That company, which will receive $33 million in BASF funding over five years, is charged with identifying drug targets in central nervous diseases.
Separately, Lynx signed an agreement worth up to $19 million with BASF granting access to MPSS for projects outside the scope of the joint venture.
Hoechst agreed to pay up to $35 million in equity, research and development support and subscription fees in support of the MPSS program.
Lynx also has development and marketing agreements with Schwarz Pharma A.G., of Monheim, Germany, and Tanabe Seiyaku Co. Ltd., of Osaka, Japan. Worth up to $31.5 million combined, those deals are centered on LR 3280, a phosphorothioate oligodeoxynucleotide antisense compound in Phase II clinical trials to treat coronary artery restenosis.
Lynx was formed in 1992 as a spin-off of Applied Biosystems Inc., of Foster City, Calif., which was acquired in 1993 by Perkin Elmer Corp., of Norwalk, Conn. *