Regeneron Pharmaceuticals Inc. stock slipped $1.13 to $10.75on Wednesday, less than half of its April 2 initial publicoffering price.

"The market's appetite for concept stocks is clearly less (than itwas)," said David Stone, an analyst at Cowen & Co. of Boston.Regeneron is a stock "which hasn't had a great history to thispoint. The momentum's been in the wrong direction," he said.

Regeneron's lead underwriter, Merrill Lynch & Co., was widelycriticized for pricing the IPO at $22, which gave the company amarket capitalization of $340 million. The offering nettedRegeneron $91 million.

In comparison, Cephalon Inc. of West Chester, Pa., which likeRegeneron is in early-stage development of treatments forneurodegenerative diseases, priced its smaller IPO at $18,giving it a market cap of $155 million.

Regeneron's market cap now is $167 million. With about $110million in cash on the balance sheet, the implied value ofRegeneron's technology is $57 million. When the IPO closed, theimplied value was $230 million.

"Regeneron is exactly the same company we were at $22 exceptwe have another $91 million in the bank," said Paul Lubetkin,company general counsel. "That means we'll be a viablecompany long enough to test our compounds in humans. Itallows us to maintain our equal relationship with Amgen (todevelop neurotrophic factors), and it gives us the financialflexibility to aggressively follow new leads." The company hasenough funds to operate into 1994, he said.

The Tarrytown, N.Y., company (NASDAQ:REGN) on Wednesdayreleased its earnings report for the first quarter ended March31. The company had a net loss of $1.1 million (7 cents a share)on revenues of $2 million. For the first quarter of 1990,Regeneron had a net loss of $913,000 (6 cents a share) onrevenues of $431,000.

-- Karen Bernstein BioWorld Staff

(c) 1997 American Health Consultants. All rights reserved.

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