Human Genome Sciences Inc. (HGS) completed its initial publicoffering on Thursday, raising $27 million. The company sold 2.5million shares at $12 per share.

Demand for the stock was so high that it opened on the market$2 above the offering price, at about $14. The stock went upfrom there, closing the day at $20.25 per share, a gain of nearly69 percent from the IPO price. A total of 1.9 million shares --about 13 percent of the total outstanding stock -- were tradedunder the NASDAQ symbol HGSI.

HGS filed a silent offering with the Securities and ExchangeCommission on Oct. 1, estimating a $12 per-share price. Theoffering price was about one-third of the $36.54 per share paidby SmithKline Beecham (SKB) in May when it made a $37million equity investment in HGS.

The lead underwriter for the IPO was Lehman Brothers. Theco-managing underwriters were Bear, Stearns & Co. Inc. andSmith Barney Shearson Inc. They have a 337,500-shareoverallotment option.

After the offering HGS had nearly 14 million sharesoutstanding (15.4 million fully diluted) and a marketcapitalization of $168 million. At the end of the day the marketcapitalization was $281 million, the largest capitalization of anycompany that has completed an IPO this year.

Launched in June 1992, HGS of Rockville, Md., incurred a netloss of $4.4 million in 1992, but had net income of $4.5 millionin the first six months of 1993. However, the company noted inits prospectus that it expects to incur a net loss by the end ofthe year.

HGS also said that the proceeds from the offering, together withits existing funds, interest income and certain anticipatedpayments from SKB, should be sufficient to meet its liquidityand capital requirements for about the next two years.

The frenzy over HGS' stock is a boon, at least on paper, forHealthCare Ventures, which together with an affiliated fund,Everest Trust, owns 41.7 percent of HGS' stock. About ninemonths ago the venture capital firm paid an average of $1.33per share for 5.8 million shares, for a total investment of $7.7million. Today the same shares are worth $117 million, a 1,425percent gain. The shares cannot be sold at this time due tolock-up provisions.

-- Brenda Sandburg News Editor

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