Incyte Pharmaceuticals Inc., which sells access to itsgenomic information data bases, bolstered its cashposition Thursday with a follow-on offering of 1.7million shares that generated more than $32 million.
The Palo Alto, Calif.-based company sold more stockthan expected, but the $19 per share offering was 18percent lower than the trading price when the companyannounced the stock sale last month.
Incyte registered to sell 1.5 million shares Oct. 13, 1995,when the stock was selling at $23.13 _ a price thatwould have raised $34.7 million.
Incyte's stock (AMEX:IPI) closed Thursday at $18.25,down 88 cents.
The secondary offering generated $32.3 million in grossproceeds and the company now has 9.65 million sharesoutstanding. At the end of the third quarter of 1995,Incyte said it had $11.6 million in cash and a net loss forthe first nine months of the year totaling $7.9 million.
Incyte, formed in 1991, was one of the first genomicscompanies to begin selling non-exclusive access to itsgene sequences. The company calls its data base Lifeseq(Library of Information for Expressed Sequences). Inaddition to DNA sequences, Incyte's information includesidentification and characterization of genes.
Incyte's first two subscribers were New York-basedPfizer Inc. in June 1994 for $25 million and Upjohn Co.,of Kalamazoo, Mich., in December for $20 million. Bothpharmaceutical firms made equity investments. Upjohnmerged with Stockholm, Sweden-based Pharmacia ABearlier this month to form Pharmacia & Upjohn Co.
This year Incyte has completed two other deals withBagsvaerd, Denmark-based Novo Nordisk A/S in August1995, and Frankfurt, Germany-based Hoechst MarionRoussel. Hoechst signed an agreement Oct. 12, 1995, thesame week Incyte registered for its public offering. Termsof the two deals have not been disclosed, but Incyte hassaid they are similar to the three-year agreements withPfizer and Upjohn. However, neither Novo Nordisk norHoechst made an equity investment in Incyte.
In addition to costs for non-exclusive access to Incyte'sdata bases, the company will receive license fees,milestone payments and royalties on pharmaceuticalproducts derived from the gene sequence information.
Incyte has said it is targeting the top 50 drug firmsworldwide as customers for its Lifeseq data base.
When Incyte announced the deal with Novo Nordisk, thecompany said it generated DNA sequences representing70,000 genes and expected to have sequenced 100,000genes by the end of this year.
Estimates of the number of genes in the human genomevary from 70,000 to 100,000. However, Incyteresearchers have said the total may be in excess of100,000.
Incyte's public offering was managed by Hambrecht &Quist LLC and Dillon, Read & Co., both of New York,and Van Kasper & Co., of San Francisco. In addition tothe 1.7 million Incyte shares sold, the underwriters havean option to purchase 255,000 shares to coveroverallotments. n
-- Charles Craig
(c) 1997 American Health Consultants. All rights reserved.