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Biotech / Medical : Ligand (LGND) Breakout! -- Ignore unavailable to you. Want to Upgrade?

To: WTDEC who wrote (19213)	4/17/1998 10:22:00 PM
From: squetch	Read Replies (1) \| Respond to of 32384

WTDEC, What areas or companies do they find cheap in the bio area? squetch

To: WTDEC who wrote (19213)	4/17/1998 10:25:00 PM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Walter, The recent H&Q report on Biotechs also indicated that a rally is just around the corner.

To: WTDEC who wrote (19213)	4/17/1998 10:27:00 PM
From: Henry Niman	Read Replies (2) \| Respond to of 32384

Speaking of VCs and Biotechs: Nanogen raises millions with IPO Thomas Kupper STAFF WRITER \| Bloomberg News contributed to this report. 15-Apr-1998 Wednesday Nanogen Inc. raised $42.9 million yesterday in the first initial public offering by an independent biotech company in San Diego in nearly a year. It was the latest example of the emergence of a new type of biotech that aims not to discover and market drugs but to develop technologies to help other companies do so. Nanogen's product is a microchip with millimeter-sized probes that enables researchers to rapidly identify samples. Eventually, the company thinks it also could be used in genetic testing or diagnostics. Despite a tough market for biotech stocks, investors have remained somewhat receptive to such "toolbox" biotechs on the theory that they are less risky and more likely to make money in the short term. In the year's first quarter, a particularly slow one for biotech IPOs, only three U.S. biotechs went public. Two of them, LJL Biosystems of Sunnyvale and Connecticut-based CuraGen, were toolbox companies. Weak performance Eddie Hedaya, an analyst with BioVest Research, pointed to the relatively weak performance of drug-development biotechs compared with large drug companies such as Merck & Co. to explain the trend. "It's a pick-and-choose game," Hedaya said. "And it's easier for institutional investors not to pick and choose if they can get their 50 percent by investing in Merck." Nanogen sold 3.9 million shares at $11 each and saw them rise as high as $12.31 1/4 before retreating to close at $11.25. That valued the company at around $200 million, already among the top dozen local biotechs. Still, the company remains in the development stage. Losses grew to $11.2 million last year from $7.8 million in 1996, and the company received just $3.4 million in 1997 revenue. The company is headed by Howard Birndorf, 48, formerly chief executive of Ligand Pharmaceuticals and before that a vice president at Hybritech, the first local biotech. Along with Birndorf's 6.7 percent Nanogen stake, worth more than $13 million at the closing price, the company's top investors include the venture capitalists Enterprise Partners and Kleiner, Perkins, Caulfield & Byers. Together the two firms control almost 15 percent of the stock. Biotechs struggling In the local biotech sector, completing the offering was an unusual success. The last company to go public was another toolbox, Aurora Biosciences, which raised $40 million in June 1997. Dura Pharmaceuticals also raised $88 million in a December offering for its Spiros Development Corp., which is developing a new type of inhaler. Biotechs in general have struggled since last October's market collapse. Though the sector rallied somewhat in March, the Amex Biotechnology Index remains 11 percent below an October peak. Jim McCamant, editor of the Medical Technology Stock Letter, said the Nanogen offering might reflect an improvement in the market for biotech IPOs, though not a recovery.