Amidst all the turbulence racking the stock markets, DoubleTwist of Oakland, Calif., set the price for its upcoming initial public offering. The company hopes to sell 5 million shares in a price range of $13 to $15 to raise from $65 million to $75 million, according to the company’s most recent filing with the US Securities and Exchange Commission.
By comparison, the Double- Twist price range is lower than those of other recent bioinformatics IPOs — InforMax ($14-$16) and Genomica ($19).
Analysts had mixed opinions on what the volatility means for bioinformatics companies seeking to go public. Aside from Double- Twist, the other bioinformatics IPO in the pipeline is NetGenics of Cleveland, which filed its registration statement back in March.
Steve Unger, a life sciences information solutions analyst at Bear Stearns, is of the opinion that the recent volatility in the biotechnology and technology sectors has not affected bioinformatics companies much, which have remained relatively stable.
While declining to comment specifically on DoubleTwist, Unger said, “The market is generally receptive to bioinformatics opportunities. They understand it and the holders that are in the stocks are believers.”
Eric Schmidt, a biotechnology analyst at SG Cowen Securities, said that on the contrary, the volatility in the stock markets affects the outlook for all IPOs right now, not just those in bioinformatics. “In general it’s sort of a temperamental market for IPOs and certainly bioinformatics IPOs as well,” he said.
It’s difficult to judge right now whether it’s a good time or not for IPOs, said Schmidt, because it de-pends on the quality of the company.
He said that some bioinformatics companies, notably Lion Biosciences, have done well immediately and in the following months after their IPOs. Others that he declined to name have not fared as well. Two such examples are Compugen and Rosetta Inpharmatics, which are trading well off their stock price highs.
Regardless, DoubleTwist is apparently pushing ahead with its IPO. The company, which originally announced its plan to go public at the beginning of September, has not determined when its stock will begin trading, said a DoubleTwist spokeswoman.
The underwriters, led by Lehman Brothers, have the option to purchase an additional 750,000 shares to cover overallotments.
In its filings, the company has said it plans to use the proceeds from the offering for product development, sales and marketing, general corporate purposes, and possible acquisitions.
The company’s product line includes DoubleTwist.com, an online research portal; Prophecy, a proprietary annotated human genome database; GeneForest, an annotated human gene index; and its Gene Clustering and Alignment Tools software.
Separately, DoubleTwist has extended its Asia-Pacific distribution alliance with Hitachi. DoubleTwist originally announced a software distribution agreement with the Japanese company in June for its clustering and alignment tools and Prophecy. In addition, the new agreement gives Hitachi exclusive rights to distribute and market the DoubleTwist.com and GeneForest as well.
—Matthew Dougherty