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CuraGen’s Brave New World
IPO expected to yield $31 million for New Haven biotech firm
CuraGen Corp. of New Haven has gone public.
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Business New Haven
4/6/1998
By: Nick Raposo
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In the company's initial public offering, three million shares of common stock valued at $11.50 each went on the NASDAQ exchange under the symbol CRGN. CuraGen's revenue from this offering should be in the neighborhood of $31 million. This is part of a larger financial restructuring of the company which includes private placement of $10 million worth of common stock with the company's collaborative research partners, Biogen and Genentech.
Curagen has also entered collaborative agreements with ArQule, a biotech information company, and Pioneer Hi-Bred, an agricultural firm, to develop gene based products for that market.
CuraGen has, and is continuing to develop, proprietary software that it believes will accelerate the development of gene-based therapeutic, agricultural and diagnostic products. This software provides a systematic approach to identifying gene expression (e.g., how genes make proteins that create diseases) and biological and signal-transduction pathways (e.g., the way cells make and protect the proteins that create disease). Their central product, in essence, is a biochemical database.
The future of CuraGen depends on whether or not it has sufficient information - and an effective information delivery system - to attract the subscription of large biotech research companies, and to a lesser extent, its ability to patent gene-based products developed internally or through research collaborations.
CuraGen can expect to face increasing competition from infotech entrepreneurs who will reverse-engineer similar software products without incurring any of CuraGen's startup costs, as well as the federal government, which has no mandate to turn a profit.
As of last December 31, CuraGen was running an accumulated deficit of approximately $10 million. However, with its new public status, collaboration and equity relationships, CuraGen is positioning itself to inform a genetically managed brave new world well into the 21st century.
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