Syntro Corp. completed a drastically downsized secondaryoffering on Thursday, the latest casualty of investors' chilledsentiments on biotech stocks.
The Lenexa, Kan., developer of genetically engineered animalvaccines raised $6.5 million through the sale of 1.45 millionshares of common stock at $4.50 per share. Syntro(NASDAQ:SYNT) had filed for a 3 million-share offering.
The company grossed only 30 percent of the nearly $22 millionimplied by the price when the offering was announced March2. At the time, the shares sold for $7.25. The stock closed down63 cents at $4.38 on Thursday.
Facing the dismal market, Medarex Inc. this week postponed itsproposed 2.3 million share offering. The Princeton, N.J.,company (NASDAQ:MEDX) is developing monoclonal antibodiesto treat cancer, AIDS and other infectious diseases, autoimmunediseases and cardiovascular disease. When the companyannounced its filing on March 19, the stock was at $12.38. Itclosed Thursday at $8.38, down 88 cents.
Analysts aren't sanguine about a quick turnaround in investorinterest.
"The group has lost some face in the eyes of investors," saidJoyce Lonergan of Cowen & Co. "Investors will be more cautiousin the concept stocks and more willing to look at companieswith earnings."
"I thought until Wednesday that there was a little crack and abreeze was blowing through," said Hambrecht & Quist analystJacqueline Siegel. "This has been a sobering experience foreverybody," she added, referring to Centocor Inc.'sannouncement Wednesday that the FDA will not approve itssepsis drug on current data. "Companies which are set on goingpublic will have to settle for lower valuations. And establishedcompanies will have to have concrete achievements to supporttheir offerings."
Jay Silverman of Nomura Research Institute was moreadamant. "The financing window is shut and people are takingtheir lumps now," he said. "People will go back to thefundamentals and pick out the winners, something that hasbeen a little overdue. We can't expect a return to the heyday oflate '91 for some time."
Still, the more intrepid companies continue to file. Viagene Inc.on Wednesday did a silent filing for a 2.25 million-share IPO.
The San Diego company hasn't put a price range on the offering."We'll move forward with the transaction, depending onmarket conditions," said Jefferson Works, chief financial officer.
Viagene plans to file this month to begin Phase I trials of itsHIV product, a drug to deliver a gene sequence for HIV intocells ex vivo. The drug is designed to stimulate the body tomount a cytotoxic T lymphocyte response to kill infected cells.The Green Cross Corp. of Japan is funding the company's HIVprogram in a deal worth up to $40 million that was announcedin April 1991.
If the offering is completed, Viagene will have 8.1 millionshares outstanding. Underwriters are First Boston Corp. andPrudential Securities. -- Karen Bernstein
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