Collagen Corp. subsidiary Target Therapeutics Inc. finished off aweek of hot initial public offerings with a flourish on Friday,raising $35.4 million and closing at $30.75, 71 percent over the$18 offering price.
Collagen was to garner about $13 million from the offering as aselling shareholder and in payments from Target from theproceeds.
Target, which is developing disposable medical devices, sold2.25 million shares in an offering that was expanded from aproposed 2 million shares at $12 to $14 per share.
Of the shares sold, 1.965 million were sold by Target(NASDAQ:TGET) and 285,000 were sold by selling stockholders,including 242,600 sold by Collagen (NASDAQ:CGEN).
Target will use the proceeds to pay a $7 million dividend tocertain shareholders, principally Collagen, and to repay $1.8million of indebtedness to Collagen, leaving $26.6 million forworking capital and general corporate purposes.
Target's devices, such as micro-catheters and guide wires, arebeing developed for use in minimally invasive procedures totreat vascular diseases of the brain associated with stroke. Thedevices also may be used to reach other disease sites accessiblethrough small vessels of the circulatory system and to deliverclot-dissolving agents and chemotherapeutics.
Target had net income of $1.2 million, or 26 cents per share, onrevenues of $9.3 million, for the six months ended Sept. 30.
After the offering, Target of San Jose, Calif., has 6.2 millionshares outstanding. Collagen of Palo Alto, Calif., now owns 55percent of shares outstanding. Underwriters Alex. Brown &Sons Inc. and Hambrecht & Quist Inc. have a 337,500-shareoverallotment option.
Six biotech public offerings, including four IPOs, raised morethan $320 million last week.
-- Karen Bernstein BioWorld Staff
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