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October 20, 1999
MAXYGEN INC (MAXY)
S-1 Filing (SEC form S1)
We are the leader in the emerging field of directed molecular evolution, the process by which novel genes are generated for commercial use. Our proprietary technologies, known as MolecularBreeding(TM), mimic the natural process of evolution and bring together advances in molecular biology and classical breeding, while capitalizing on the large amount of genetic information being generated by the genomics industry. Unlike conventional technologies, MolecularBreeding technologies are efficient, in part because they require minimal understanding of complex underlying biological mechanisms. Our technologies enable us to rapidly develop novel genes for commercial applications that would be difficult or impossible to develop or find through other processes. We believe our MolecularBreeding technologies are commercially applicable to a broad range of industries. We are currently conducting research on more than 35 product candidates for the chemical, agricultural and pharmaceutical industries, enabling us to potentially generate short-term as well as long-term revenues.
We have established collaborations with Novo Nordisk, DuPont/Pioneer Hi- Bred, AstraZeneca and DSM, all leaders in their respective markets, as well as United States government agencies. Committed funding from our commercial collaborators and U.S. government agencies totals over $94 million. Additionally, we may receive milestone payments of over $145 million based on the accomplishment of specific performance criteria, as well as royalties on product sales. While we will continue to establish strategic collaborations with leading companies and pursue additional grants from U.S. government agencies, we will also invest our own funds in certain specific areas. To that end, we have retained significant rights to future applications of our technologies.
Our Target Markets
Our technologies address a number of multi-billion dollar industries. Our target markets include chemicals, agriculture, protein pharmaceuticals and prophylactic and therapeutic vaccines. Within these markets, we are focused on specific high-value opportunities. In chemicals, we are developing novel biocatalytic processes that could increase yields and decrease manufacturing costs for multiple products. In addition, we believe biocatalytic processes may have utility for generating novel useful materials. In agriculture, we are applying our technologies to potentially increase crop yield and qualities, such as enhancing nutritional value for human food or animal feed. In pharmaceuticals and vaccines, we are focused on developing products for a number of indications, including multiple forms of cancer, infectious diseases such as HIV and hepatitis, and autoimmune diseases such as rheumatoid arthritis and multiple sclerosis.
Our Technologies
Our MolecularBreeding technologies consist of two components: DNAShuffling(TM) recombination technologies and MaxyScan(TM) screening systems. DNAShuffling is the process of recombining single genes or gene families to generate a library of novel genes. MaxyScan is a series of specialized screening systems that efficiently and rapidly select those gene products and enzymes best suited for specific commercial purposes. We have an extensive patent portfolio, including 15 issued U.S. patents, of which five are owned by us and 10 are in-licensed. Furthermore, we have over 40 families of patent applications relating to our MolecularBreeding technologies, the application of our technologies to diverse industries, and specific proteins improved by the application of our technologies.
Our Accomplishments
We have attracted a multi-disciplinary team comprised of leading experts in the field of directed molecular evolution. We have consistently been able to generate significant enhancements in many different genes that have relevance to multiple commercial applications. We have demonstrated improvements in 10 product candidates and have an additional 25 product candidates in earlier stages of development. For example, we have increased the anti-viral activity of a protein and developed novel enzymes which have the potential to streamline chemical and pharmaceutical manufacturing processes. In addition, we have significantly improved the performance of multiple commercially relevant properties of the industrial enzyme subtilisin, a product that had annual sales of $500 million in 1998. Subtilisin is one of the most highly studied and engineered enzymes. This example demonstrates the ability of MolecularBreeding to achieve significant improvements beyond the limits of modern biotechnology.
We have established strategic alliances with recognized leaders in their respective industries. To date, these include Novo Nordisk in the area of industrial enzymes, DuPont/Pioneer Hi-Bred and AstraZeneca, each in agriculture, and DSM in antibiotic manufacturing. Since 1997, our collaborators have committed funding of over $67 million, of which approximately $23 million has been received, including $10 million in equity investments. In addition, we could receive over $145 million in milestone payments based on the accomplishment of specific performance criteria, as well as royalties on products sales. We have received six grants from U.S. government agencies with total committed grant funding of over $27 million, of which approximately $4 million has been expended. These grants are primarily for the development of vaccines and the advancement of our MolecularBreeding technologies.
Our Strategy
Our strategy has four major components. First, we will continue to develop our core MolecularBreeding technologies to extend our proprietary technology leadership by investing significantly in research and development programs. Second, we will continue to establish strategic collaborations with leading companies in targeted industries and will pursue additional grants from U.S. government agencies. We have retained, and intend to continue to retain, significant rights to develop and market certain applications of products arising from our strategic collaborations. Third, we plan to develop multiple products in the chemicals, agriculture and pharmaceutical industries to generate revenues in the short-, medium- and long-term. We expect to receive a diversified royalty stream from the sale of commercial products and processes that may be developed and commercialized by our existing collaborators as well as revenues from any products that result from our grant-funded programs and self-funded programs. Finally, we plan to retain rights to use our technologies in multiple applications. We will invest our own funds in selected areas and product opportunities with the aim of capturing a high percentage of profits on product sales.
Our History
We began operations in 1997, to commercialize technologies originally conceived by Dr. Willem P.C. Stemmer while at Affymax Research Institute, a subsidiary of Glaxo Wellcome plc. We were incorporated under the laws of Delaware on May 7, 1996. |
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