A comment on the IPO:
Friday December 3, 2:00 pm Eastern Time
Tularik's early-stage drug pipeline may limit IPO
By Deana Beasley
LOS ANGELES, Dec 3 (Reuters) - An initial public stock offering next
week by development-stage biotechnology company Tularik Inc.
(NasdaqNM:TLRK - news) may have trouble attracting interest in a
market enthralled by high technolgy, analysts said.
Tularik, which takes its name from an Alaskan river where its founders went fishing, seeks to develop drugs
using gene regulation to treat cancer, diabetes and other diseases.
The company plans to sell 6.25 million shares in a projected range of $11-$13 per share next Friday, which
would raise between $68.75 million and $81.25 million.
``They are well respected and have some great pre-clinical stuff,' Sushant Kumar, an analyst at Mehta
Partners, said. ``But nothing that is near the commercial stage.'
The company has research collaborations with companies such as Knoll Inc. (NYSE:KNL - news), for an
obesity treatment, Roche Bioscience, for an inflammation product, and Japan's Taisho Pharmaceutical Co.,
for immune disorders.
Tularik also has several drugs in clinical trials, including cancer-fighting lometrexol, licensed from Eli Lilly
and Co.(NYSE:LLY - news), which is expected to begin Phase II trials next year.
The company describes another of its drugs, known as T-67, as a possible improvement on Bristol-Myers
Squibb Co.'s (NYSE:BMY - news) Taxol, which is the world's most widely used cancer drug, since it
operates in different ways and appears not to create the kind of resistance to chemotherapy associated with
Taxol.
``Tularik is one of the few biotech companies to offer an IPO in a long while; the focus has been on
technology companies,' said Steve Tuen, director of research at IPO Value Monitor. ``There are still a lot
of unknowns in the biotech industry. Tularik's products are mostly in Phase I.'
David Goeddel, formerly the top scientist at biotechnology leader Genentech Inc. (NYSE:DNA - news), is
chief executive of Tularik, which was founded in 1991 and is based in South San Francisco, Calif.
He played a prominent role in the recently settled dispute between Genentech and the University of
California at San Francisco, which had sued the company for infringement of a patent for a human growth
hormone.
In a trial earlier this year that resulted in a hung jury Goeddel testified that Genentech did not engage in any
deliberate theft or fraud, but the case was recently settled when Genentech agreed to pay the university
$150 million and contribute $50 million toward the building of a new biological sciences research building.
After the IPO, Goeddel and Swiss investment vehicle Pharma Vision 2000 AG will own more than 25
percent of Tularik. Other current investors include the research partners and Genentech.
Tularik said in a filing to securities regulators that it had $11.9 million in research and development revenue
during the first six months of 1999 and posted $9.8 million in net losses.
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