Affymetrix Inc., which has developed a system for quick analysis ofDNA sequences for genetic testing and gene discovery, is goingpublic in a bid to raise about $60 million through an initial publicoffering (IPO) of 5 million shares.
When the Santa Clara, Calif., company, which is 46 percent ownedby London-based Glaxo Wellcome plc, registered for the IPO, itlisted a per-share price range of $11 to $13 for anticipated grossproceeds of $55 million to $65 million.
At the end of 1995 Affymetrix had $39 million in cash and reported anet loss for the year of $10.7 million. Following the offering thecompany will have 21.2 million shares outstanding. Underwriters areRobertson, Stephens & Co., CS First Boston Corp. and MontgomerySecurities, all of New York.
Glaxo acquired its stake in Affymetrix last year when thepharmaceutical firm purchased Affymax N.V., of Amsterdam, theNetherlands. Affymax, a combinatorial chemistry company, startedAffymetrix in 1991 and launched it as a subsidiary two years later.
Affymetrix created a GeneChip system for analyzing DNA sequencesand is commercializing it as a tool for discovering genes and theirfunctions and for detecting genetic mutations linked to diseases.
The company Friday said it entered into an agreement with IncytePharmaceuticals Inc., of Palo Alto, Calif., for evaluation of thetechnology to detect expression of specific genes in normal anddiseased tissues. Financial terms were not disclosed.
Affymetrix also has collaborations with Genetics Institute Inc., ofCambridge, Mass., for determining gene function and with Hewlett-Packard Co., of Palo Alto, Calif., for development of advancedinstruments used in the GeneChip system. The Hewlett-Packardcollaboration also includes development and marketing of GeneChipsby the computer company.
The Genetics Institute program began in November 1994 and wasexpanded in February 1996. Using the GeneChip, Genetics Institutesaid over the next two years it will analyze 15,000 genes to determinewhether they are switched on or off in normal and diseased tissues.
In its IPO prospectus, Affymetrix said the first commercialapplication of the GeneChip was launched this month. The companyis contracting with research centers and pharmaceutical firms toidentify HIV mutations that help the AIDS virus resist antiviral drugs,such as AZT, which is sold by Glaxo Wellcome.
In describing its technology, Affymetrix said from 16,000 to 100,000different strands of DNA can be synthesized on a chip 1.2centimeters square and used to detect and analyze thousands of DNAsamples simultaneously. When a piece of unknown DNA, labeledwith a fluorescent tag, is placed on the chip, its sequence is revealedafter it binds to a known complementary synthesized strand. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.