Perlegen Scuttles IPO Plan on Advice to Wait for Results of 'Important' Genetic Studies
Perlegen Sciences has withdrawn its plans for an initial public offering, according to a letter the company sent to the US Securities and Exchange Commission this week.
Perlegen, a subsidiary of Affymetrix, separately said it has named former Chiron official Bryan Walser interim CEO.
In his April 30 SEC letter, Affy CEO Stephen Fodor said Perlegen’s board last May “determined not to proceed with the offering” after its lead underwriters advised the company to wait for “the outcome of certain genetic studies in connection with an important, ongoing research initiative.”
Perlegen filed for an IPO last April, saying it hoped to raise as much as $115 million [see 4/16/2006 PGx Reporter].
In Monday’s letter, Fodor wrote that “coincidentally” with the board’s decision to scuttle the IPO, the company’s audit committee found that in 2005 Perlegen had billed the federal government around $1.3 million for costs related to a contract “that were not properly recoverable.”
Fodor said the company credited those costs back to the government, and that the audit committee had advised Perlegen it must “strengthen controls related to government contracting activities, as well as the company’s overall internal control and compliance environment.”
These changes would include “changes in financial reporting management, structure, and personnel” of Perlegen, Fodor added.
Fodor's letter can be found here.
Fodor, who is also chairman of Perlegen’s board, said in a statement this week that Bryan Walser will take over management for the company’s operations and its organizational development, and will work on “honing Perlegen’s strategic mission.”
Walser had previously worked as vice president of strategy and corporate affairs at Chiron.
"While our board envisioned expanding the senior team with the recruitment of a new CEO and was in the process of starting a formal search, the chance to bring Dr. Walser into the company presented itself, and we decided to take advantage of the opportunity,” Fodor said in the statement.
Fodor added that the hunt for a new CEO will continue but that Walser “remains a candidate” for the permanent CEO position.
Beckman Meets Inverness' Rival Bid, Extends Offer to May 15
Beckman Coulter has matched Inverness Medical Innovations’ offer to acquire Biosite, Biosite and Beckman said this week.
As a result, Beckman and Biosite have signed a new agreement under which Beckman would buy Biosite for $90 a share, a per-share increase of $5 over the firm’s original bid.
The deal would now be worth an estimated $1.67 billion.
Biosite said last week it intended to accept a rival offer from Inverness, whose unsolicited bid raised the ante from $85 per share to $90 per share.
Biosite said that all “necessary regulatory clearances have been received,” and said it will provide more detailed information about the new agreement this week.
Beckman Coulter has also extended the new offer until the end of the day on May 15. Under the terms of the amended agreement, Beckman is not obligated to extend the amended offer beyond that date, but retains the right to do so.
NIGMS Offering $1.6M for Genetics Studies Into 'Complex' Human Phenotypes
The National Institute of General Medical Sciences plans to offer $1.6 million to fund three or four new grants to study the genetic mechanisms that underlie complex human phenotypes, and how these different traits are encoded in DNA.
The National Institutes of Health said it is asking researchers, including those working in academic, small business, or government labs, to submit proposals for up to $250,000 to be granted over four years.
The NIH said the long-term goal of the research is to “understand the molecular mechanisms that underlie complex diseases in humans in order to improve diagnosis, treatment, and prevention.”
The research “ideally” would be conducted using human subjects, though the NIH said it expects researchers to develop animal studies.
For the purposes of these grants, the NIH said, researchers must plan to demonstrate how the research on animals will inform future experiments concerning complex human phenotypes.
Applications are due by Oct. 24.
The full RFA may be viewed here.
Gene Logic's Revenues Tumble; Firm Continues to Mull Genomics Arm
Gene Logic said last week its first-quarter revenues fell 63 percent as R&D spending remained flat and net losses narrowed 17 percent.
Total receipts for the three months ended March 31 fell to $3.3 million from $8.7 million year over year.
All of the company’s revenue came from its genomics services business. Gene Logic reiterated that it has hired outside advisors to “assist in considering strategic alternatives” for its genomics business.
R&D was flat for the first quarter at $2.4 million.
The company said net losses decreased to $10.1 million from $11.8 million in the year-ago period.
As of March 31, Gene Logic had $27.4 million in combined cash and cash equivalents, and $15.7 million in marketable securities.
German Genomics Project Buys Genotyping Tools From Illumina and Affy
The National Genome Research Network of Germany has bought hardware from Illumina and Affymetrix for large-scale research projects that aim to genotype more than 20,000 patients in studies of major diseases, Illumina and Affymetrix said separately last week.
Affymetrix said the NGFN has purchased its Genome-Wide Human SNP Array 5.0 to genotype 17,000 individuals in a study of 25 diseases, including Alzheimer’s and Parkinson’s diseases, malaria, heart disease, and epilepsy.
Affy said it will supply the NGFN with its SNP Array 6.0 when it is available later in the year.
Illumina said the NGFN purchased its Infinium HumanCNV370-Duo, HumanHap300-Duo, and HumanHap550 BeadChips.
The company said the NGFN will employ these tools in an 8,000-subject genotyping study investigating bipolar disease, Parkinson’s and Alzheimer’s diseases, alcoholism, inflammatory bowel disease, and psoriasis.
The data from these studies will be compared against information from healthy subjects to identify genetic variations that may be linked to the disease.
The NGFN is a genomics research program commissioned in 2001 by the German Federal Ministry of Education and Research. The program’s second phase runs between 2004 and 2007 and it is fuelled by €135 million ($184 million) in German government funds.
Financial terms of the agreements were not released.
Affy's Sales Slide 7 Percent in Q1 as Charges Turn Profit to Loss
Affymetrix announced last week that its first-quarter revenues dropped 7 percent as R&D spending fell 16 percent and a profit turned to a loss on restructuring charges.
Total receipts for the three months ended March 31 fell to $80.4 million from $86.4 million year over year.
Product and product-related revenue decreased 10 percent to $71.3 million; royalties and "other" revenue increased 33 percent to $2.4 million; and receipts from Perlegen rose 26 percent to $6.7 million.
R&D spending decreased to $19.7 million from $23.5 million.
The company said net loss was $4 million, down from a profit of $1.8 million in the year-ago period. Affy said the disparity was the result of $5.4 million in restructuring charges.
Affy said it had around $96.3 million in cash and equivalents and $146.9 million in short-term investments as of March 31.
DeCode's Q1 RevenueFalls 15 Percent as R&D Spending Slides and Loss Widens
DeCode Genetics reported this week that its first-quarter revenues decreased 15 percent as R&D spending dropped 18 percent and losses rose 9 percent.
Total receipts for the three months ended March 31 fell to $8.6 million from $10.1 million year over year.
DeCode said it also had $11.6 million in deferred revenue at the close of the first quarter, which it will recognize over future periods.
R&D spending fell to $12.7 million from $15.5 million year over year.
The company said losses increased to $22.6 million from $20.7 million in the year-ago period.
CEO Kari Stefansson said that the company plans to launch other diagnostic tests this year and that DeCode’s results reflect its focus on “advancing and expanding [its] product pipeline, therapeutics and diagnostics.”
DeCode said it had around $135.1 million in cash, cash equivalents, and investments as of March 31.