Progenitor Inc., a majority-owned subsidiary of InterneuronPharmaceuticals Inc., is the second biotechnology company in amonth to postpone an initial public offering (IPO) because of poormarket conditions.
Douglass Given, Progenitor's president and CEO, said his Columbus,Ohio-based company "will evaluate the market as we move out ofsummer and into the fall. We expect the markets to improve."
Biotechnology stocks fell into a summer slump following a record-setting year in which share prices soared and companies raised morethan $5 billion in public offerings.
Aviron Inc., a Mountain View, Calif., vaccine company, registeredfor an IPO in June 1996 at the same time as Progenitor. Avironpulled out of the market in late July 1996. Its officials said theyintend to seek a private placement to raise funds this fall beforeheading back into the public markets.
Given said Progenitor can afford to wait for a better reception for itspublic debut because of financial backing from its parent company,Interneuron, of Lexington, Mass. Since Progenitor was formed in1992 it has operated on a line of credit from Interneuron.
Given said none of his company's programs will be slowed bypostponement of the IPO. For the first six months of 1996, Progenitorreported a net loss of $1.5 million.
When Progenitor registered for the offering it hoped to sell 2.5million shares in a projected price range of $11 to $13. Based on $12per share, the company anticipated generating $30 million. It filed forthe IPO two days after Interneuron completed a $117 million follow-on offering.
Progenitor, a gene therapy and functional genomics company, signedtwo major corporate collaborations in 1995 worth up to a combined$100 million.
A deal with Chiron Corp., of Emeryville, Calif., is a long-termalliance for development of gene therapies for cancer, cardiovasculardisorders and infectious diseases. The two companies, in an initialproject targeting cancer, will use Progenitor's nonviral vectors todelivery a herpes simplex thymidine kinase activator with ganciclovirto destroy tumors.
The second collaboration, with ZymoGenetics Inc., of Seattle,focuses on development of two Progenitor blood cell growth factorsfor use in restoring bone marrow in cancer patients undergoingchemotherapy and radiation.
The product leads were the first identified in Progenitor's efforts tofind cellular growth factors involved in the production anddifferentiation of precursor cells for blood and the immune system.
ZymoGenetics is a subsidiary of Novo Nordisk A/S, of Bagsvaerd,Denmark.
Progenitor is one of four majority-owned subsidiaries of Interneuron.The other three are InterNutria Inc., of Lexington, Mass.; IntercardiaInc., of Research Triangle Park, N.C.; and Transcell TechnologiesInc., of Princeton, N.J. Intercardia went public in February 1996 at$15 per share, raising $38 million. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.