|
|
|
CuraGen
Goes Public
New Haven biotech firm applies for
SEC blessing for IPO
|
Business New Haven
1/26/1998
By: Russell Stone
|
CuraGen Corp. of New Haven, a firm specializing in genetic research, has filed an application with the Securities & Exchange Commission to go public on NASDAQ under the symbol CRGN after several years as a private company. Morgan Stanley will serve as lead underwriter, with Lehman Brothers and Bear, Stearns.
Due to stringent SEC restrictions on insider trading, the date of the initial offering, as well the number of shares to be issued, has not yet been made public. The company has just under nine million shares outstanding, though they are not traded publicly.
CuraGen plans to use $10 million of the proceeds of the stock offering for capital expenditures and investments, along with another $1.75 million to buy back its outstanding preferred stock. The remainder will go toward capital investment and further research.
Founded by Jonathan Rothberg and Gregory T. Went, CuraGen has production facilities and laboratories in New Haven and Branford. The company also has laboratories in Gainesville, Fla., and supports scientific research at Yale and the University of California/Berkeley.
What makes CuraGen unusual, particularly by comparison to other New Haven biotech companies, is that it has major interests in both agricultural genetics - designing hardier and more productive plants - and the treatment of human genetic disorders.
CuraGen is able to do this by virtue of its niche in gene expression. The company concentrates on finding, first, the specific genes responsible for a given trait, whether that trait is good frost resistance or genetic disease. The next step is determining the exact link, the biological pathway, between the gene on a strand of DNA and how it manifests itself in the organism.
Though CuraGen has in the past received much support from government research grants, Curagen's current revenues come largely from collaboration with other biotech firms to use Curagen's proprietary technologies. In July, Curagen signed what executive vice president Went called “our first major alliance” to work with Pioneer Hi-Bred International to discover the genetic bases of seed performance. Pioneer wants to produce better seeds; Curagen hopes to use this experience with plant genetics to improve its ability to treat human genetic disorders.
Two more agreements in November with Biogen and Genentech will put Curagen's technology to use in searching for disease treatments. Biogen and Genentech each agreed to buy $5 million in CuraGen common stock. Both companies also agreed to provide loans totaling $36 million and convertible into Curagen stock. Curagen also stands to benefit from Biogen payments when and if new therapies grow out of Curagen's research.
CuraGen's balance sheet resembles that of many other biotech startups. The initial stages of research are expensive and take time to produce marketable results. Accordingly, CuraGen lost $916,000 in 1994, $847,000 in 1995, and $233,000 in 1996.
Over the first nine months of 1997, losses jumped sharply to $4.3 million, as research and administrative expenses nearly tripled, even as revenue grew by a third. The company attributed this to expanding its staff and facilities in anticipation of further revenue growth - growth it hopes to fund by selling stock to the public.
|
Go FirstGo PreviousGo
NextGo LastGo
to Index
|
|
