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UPDATE: Lynx Reschedules Equity Offering for Early 2001

This story has been updated from a previous version.

NEW YORK, Oct 31 - Lynx Therapeutics is planning an equity offering for the beginning of 2001 after market volatility scuttled the company’s plans to raise $100 million earlier this year, CFO Edward Albini said Tuesday.

“We expect to do a follow-on equity financing deal in much the same form early next year,” Albini told GenomeWeb.

The company, which has seen its cash reserves dwindle to $19.8 million at the end of the third quarter from $30.8 million a year ago, had hoped to sell 1.5 million shares at about $66 each back in March.

But the company halted its plans in March, after comments by US President Clinton and UK Prime Minister Tony Blair sent the market into a tailspin.

Albini said the company has not yet determined how much money it would seek to raise.

“We don’t need that amount of money,” said Albini, referring to the $100 million the company previously hoped to raise. “Certainly if it was there, I wouldn’t turn it away.”

It would likely be tough for the company to raise such a large sum since the company's share price has plummeted from a 52-week closing high of $96 7/8 on March 1 to $16 13/16 in recent trading.

Although a number of genomics companies have successfully raised money in the equity markets since the March downturn, Albini said Lynx decided to wait until it closed more deals and had a “stronger fundamental story” to tell potential investors.

Over the last three months, Lynx has signed three deals. On Tuesday, it announced a gene-finding collaboration with Singapore’s Institute of Molecular and Cell Biology.

The company, which was spun off as a publicly traded company by Applied Biosystems in 1992, has never had its day in the IPO sun. It raised $25 million in private financing about three years ago.

Earlier Tuesday Lynx said its third quarter revenues tripled to $3.4 million from $1.1 million in the corresponding period a year ago as sales of its technology and service fees from customers and partners increased.

For the quarter total operating costs and expenses rose to $8.60 million, compared with $5.32 million in third-quarter 1999 as the cost of service fees and general and administrative expenses stemming from higher personnel and facility maintenance costs increased.

R&D expenditures were also up, rising to $5.87 million from $4.26 million a year ago.

Third-quarter net losses rose to $5.0 million, or 44 cents a share, compared with $4.0 million, or 36 cents a share, in the same period last year.

For the fourth quarter, Lynx estimated that revenues from existing customers and partners would increase slightly to about $3.5 million. For the year, revenues are expected to reach and $12.5 million, up from $7.8 million a year ago.

Based on revenue forecasts, the company expects net losses of $4.5 million for the fourth quarter and $13.5 million for full-year 2000.  

“Growth in revenues and a decrease in net losses from the related estimated levels above for these periods will be based heavily on the type and timing of new Lynx collaborations and agreements and the related demand for, and delivery of, Lynx's services or products,” the company said.

Lynx’s gene express and gene variation technologies are based on its Megaclone system, a proprietary cloning procedure that transforms a sample containing millions of DNA molecules into one made up of millions of micro-beads, each of which carries approximately 100,000 copies of one of the DNA molecules in the sample.

Lynx's systems include the Massively Parallel Signature Sequencing technology, Megasort, which provides differentially expressed gene sets, and Megatype, which is expected to offer SNP disease or trait information.

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