Microcide Pharmaceuticals Inc., battling the problem of bacterialresistance to overused antibiotics, received a warm reception fromWall Street for its initial public offering (IPO), raising gross proceedsof $35 million on the sale of 2.5 million shares.
The Mountain View, Calif., company's IPO was priced at $14 pershare, which was at the top end of the $12 to $14 range projected inthe final prospectus for the offering.
Microcide's stock (NASDAQ:MCDE) debuted Wednesday andclosed at $18.50, a 32 percent increase.
Following the offering, Microcide has 10.2 million sharesoutstanding. Underwriters Merrill Lynch & Co. and Cowen & Co.,both of New York, and Alex. Brown & Sons Inc., of Baltimore, haveoptions to purchase another 375,000 shares to cover overallotments.
When it registered for the IPO in March 1996, Microcide said itended 1995 with $8.5 million in cash and reported a net loss for theyear of $3.5 million. (See BioWorld Today, March 22, 1996, p. 1.)
Microcide has two basic approaches to overcoming the problem ofreduced effectiveness by long-used antibiotics. The company isdeveloping new antibiotics that target specific bacterial resistancemechanisms and small molecules that target bacterial genes essentialfor keeping microbes alive.
Microcide has collaborations with Johnson & Johnson, of NewBrunswick, N.J., Daiichi Pharmaceutical Co. Ltd., of Tokyo, andPfizer Inc., of New York.
The deal with Pfizer was negotiated the same month Microcideregistered for the IPO. In addition to a $5 million purchase of morethan 570,000 convertible preferred shares and licensing fees, whichwere not disclosed, Pfizer agreed to pay up to $32.5 million inmilestone payments.
The Pfizer alliance focuses on bacterial genetics and targets specificgenes essential for microbes to grow and become virulent. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.