ArQule Inc., which is using its combinatorial chemistry technology inthree major collaborations, filed for an initial public offering (IPO) oftwo million shares.
The three-year-old Medford, Mass., company expects the shares to bepriced at $11 to $13 each, generating gross proceeds of about $24million. Underwriting the offering are Hambrecht & Quist LLC andOppenheimer & Co., of New York, and Vector SecuritiesInternational Inc., of Deerfield, Ill.
ArQule is using its combinatorial chemistry techniques incollaborations with the Solvay Group, Abbott Laboratories andPharmacia Biotech AB. The company's technology integratesstructure-guided drug design, high-speed parallel chemical synthesisand information technology to identify and optimize drug candidates.
The company said in its prospectus its proprietary "automatedmolecular assembly plant" (AMAP) system and structure-activityrelationship data regarding biological targets and modular molecularcomponents allow it to produce significant quantities of pure smallorganic compounds in logically structured arrays.
ArQule said its approach differs from traditional synthetic chemistryand current combinatorial chemistry because its arrays are created byusing structure-guided and rational drug design tools tosystematically select and assemble molecular building blocks withproperties likely to exhibit biological activity.
The compounds, designed around certain core structures or themes,are each different from the adjacent compounds as a result of a singlestructural modification. Each array omits closely analogouscompounds, using representative diversity to create a logicalrepresentation of a virtual library of hundreds of times as manycompounds as are in the array. Therefore, ArQule said, savings arerealized since thousands of compounds in each array can be screenedrather than the millions of compounds they represent.
ArQule produces two kinds of arrays to its partners. One is MappingArray compound sets, which are arrays of novel, diverse small-molecule compounds used for screening. The second is DirectedArray compound sets, which are arrays of analogues of a particularlead compound, synthesized for the purpose of optimization.
ArQule's first major collaboration, signed in March 1995 withUppsala, Sweden-based Pharmacia Biotech, was valued at $30million, a significant portion of which was to be in up-front andresearch and development payments. Pharmacia intends to applyArQule's technology to four areas of its business: chromatographyseparation media, electrophoresis and membrane-based products andbiochemicals and reagents for life science research. (See BioWorldToday, March 14, 1995, p. 1.)
ArQule's second collaboration, with Abbott, of Abbot Park, Ill., wasvalued at $35 million. ArQule will take a template molecule providedby Abbott and create a mini-library of variant compounds. The dealalso provides Abbott the ability to screen ArQule's libraries. (SeeBioWorld Today, June 20, 1995, p. 1.)
The Belgium-based pharmaceutical firm Solvay is paying up to $50million over five years for access to ArQule's technologies. (SeeBioWorld Today, Nov. 3, 1995, p. 1.)
After the initial offering ArQule will have nearly nine million sharesoutstanding. That does not include 1.1 million shares issuable uponthe exercise of options with an average price of $2.21 per share. Ithad $6.4 million in cash on June 30, 1996, with a net loss of$754,000 for the first six months of the year. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.