Two significant corporate partnerships forged late last year havehelped Genome Therapeutics Corp. go from a mostly unknowncompany to one that sold 50 percent more shares than proposed in a$39 million public offering.
The Waltham, Mass., company said Friday it sold 3 million shares at$13 each, about $10 per share more than the stock was trading at ayear ago. Genome Therapeutics on Jan. 10, 1996, proposed selling 2million shares. (See BioWorld Today, Jan. 11, 1996, p. 2.) At thattime it was anticipated the offering would gross $18 million, or 2million shares at $8.78 apiece.
The stock (NASDAQ:GENE) continued its surge Friday, gaining$1.06 to close at $14.88 in trading of 1.2 million shares.
Oppenheimer & Co. Inc., of New York, underwrote the offering andhas an option to purchase 450,00 shares to cover overallotments.
Oppenheimer analyst Matthew Geller, like company officialsrestricted from discussing Genome Therapeutics specifically, said"there's a lot of demand for new names in biotech stocks. People likethe idea of genomics as a new technology. They like the idea ingeneral of less risk, because the companies have a technology asopposed to having to conduct trials that are extensive and potentiallycould fail."
Genome Therapeutics now has about 16.7 million shares outstanding.It reported having about $8 million in cash on Nov. 25, 1995, and hassaid it intends to be profitable this year.
The company's two corporate collaborations stem from genomicswork in the area of disease-causing pathogens. An agreement reachedlast September with Astra AB, of Sodertlje, Sweden, came fromGenome Therapeutics' sequencing of the Helicobacter pylorigenome; and a potential $43.5 million deal signed in December withSchering-Plough Corp., of Madison, N.J., centers around anunidentified disease-causing pathogen.
When that deal was done a company official said a push will be madein 1996 into human genomics. Much of its work in that area involvestargets in the central nervous system.
While Genome Therapeutics is not a new company, it is a new namein biotechnology. The company in late 1994 changed its name fromCollaborative Research Inc. to more accurately reflect the work it hadbeen doing for 10 years in molecular genetics. Its stock was in the $2range at the time.
Genome Therapeutics uses gene mapping, DNA sequencing andcomputational molecular biology in its research. It also has anexclusive license to computer-assisted, high-throughput multiplexsequencing technology developed at Harvard Medical School. n
-- Jim Shrine
(c) 1997 American Health Consultants. All rights reserved.