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Money & Finances: Jul 27, 2000

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•   Fresh from raising $35.4 million in a private placement, Compugen of Tel Aviv, Israel, announced plans for an initial public offering.

Compugen has filed for an initial public offering of 5 million of its shares on the Nasdaq at a proposed price of $10 to $12 a share.

Compugen posted net losses of $7.1 million in 1999, compared with $3.1 million in 1998. Revenues for the year fell to $3.2 million, compared with $4.5 million in 1998.

Compugen designs software for analyzing genetic and protein sequences. It also offers its services to individuals through its LabOnWeb.com website.

•   Incyte Genomics of Palo Alto, Calif., beat Wall Street’s expectations, announcing second-quarter net losses of $6.6 million, or 21 cents a share, compared with net losses of $7.4 million, or 26 cents a share, for the year ago period.

Analysts had expected Incyte to lose 39 cents a share in the quarter. They attributed income from investments as the main driver behind the better-than-expected losses.

Revenue rose to $46 million in the second quarter, compared with $37.9 million a year ago.

Operating expenses rose to $60.4 million from $45.6 million in the same 1999 quarter.

In another announcement, Incyte declared a two-for-one stock split for shareholders of record on August 2.

 Shares were recently trading at about $90, less than a third of its peak price of about $289 reached in February.

  Gene Logic posted second quarter net losses of $5.1 million, or 20 cents a share, compared with $4.4 million, or 22 cents a share, a year ago.

Revenues for the period jumped 26 percent to $6.5 million due to new subscribers to the GeneExpress database.

“The closure rate for subscriptions to the GeneExpress database is clearly on track for the first half of 2000,” said CFO Philip Rohrer.

“We continue to see slight delays in the growth of our revenue line due to the timing of subscriptions,” he added.

Operating expenses rose to $15.5 million, compared with $9.8 million in second-quarter 1999.

•   Affymetrix, the maker of disposable DNA probe arrays, reported a narrowing of its second quarter net losses, but not enough to meet analyst expectations.

The company’s net losses totaled $6.1 million, or 22 cents a share, compared with $8.3 million, or 33 cents a share, a year ago.

Wall Street had expected the Santa Clara, Calif., to post losses of 15 cents a share.

The company’s chief financial officer Edward Hurwitz attributed the shortfall to expenses incurred in a licensing battle with privately-held British Oxford Gene Technology.

Hurwitz expects the legal expenses to drain earnings for at least three more quarters, as the Oxford Gene trial along with another dispute with Incyte continue into next year.

Nevertheless, Hurwitz hopes continued increases in sales revenue will help the company break even by the end of the year.

Revenues for the quarter rose to $45.4 million from $24.9 million.

Separately, Affymetrix announced plans for a two-for-one stock split at the close of business on August 10. Its stock was recently trading at about $195.

•   Swiss-based privately held start-up Geneva Proteomics is $40 million closer to its goal of exploring cells’ protein profiles after successfully closing a recent round of financing. 

Investors include Fidelity Management and Research and the Canton of Basel Land’s pension fund.

Using some 50 mass spectrometers, Geneva Proteomics plans to compete with the likes of Celera and Incyte to deliver proteomes, maps of all the proteins in a particular cell or tissue, and ultimately a proteomic database.  The amount and type of proteins vary from cell to cell, person to person, and throughout the progression of a disease, making variations in protein profiles potentially valuable in drug development.

Beginning with blood plasma, the company plans to establish a proteomic database by next year.

•   Drug discovery toolmaker LJL BioSystems said its second quarter net losses narrowed to $2.3 million, or 15 cents a share for 14.8 million shares outstanding, compared with net losses of $2.6 million, or 20 cents a share for 12.6 million shares outstanding, in the corresponding period a year ago.

 Revenues for the quarter rose 85 percent to $3.7 million.

 Operating expenses rose 29 percent to $3.9 million for the period.

 The Sunnyvale, Calif.-based company warned, however, that revenues and gross margins may fluctuate in the future “due to changes in product mix and sales volumes, seasonality, and other factors.”

•   Reykjavik, Iceland-based deCode Genetics raised $173 million in its IPO in the United States selling 9.6 million shares at $18 each.  It opened at $28.50 and soared to $31.50, but quickly dropped to $24.75.  It has yet to hit $30 since.

The company is building a genetic database of the relatively homogenous Icelandic population it hopes will highlight the subtle changes in genes responsible for particular diseases.  

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