Gene Logic Inc., a fast-growing Columbia-based company working on identifying the role genes play in disease, said yesterday that it has raised $20 million in private financing from a group of U.S., European and Canadian investors.
"This was a really stellar transaction," said Zach Hulsey, San Francisco-based head of the private placements group for Hambrecht & Quist, which acted as financial adviser for the deal. "This is a company with good science and a good sense of where they are going with their business. They have an excellent management team."
Hulsey, a principal in Hambrecht & Quist, said the $20 million raised was slightly higher than the average amount raised this year in a second round of financing for a promising emerging biotechnology company.
"We initially targeted raising $15 million, but the interest was so great we raised it to $20 million," Hulsey said. "We still ended up cutting some people back on their stakes."
The money raised in the deal will be used to expand the company's computerized database of human genes and how they change as diseases progress and during treatment, said Mark Gessler, senior vice president and chief financial officer at Gene Logic.
The genomics company also expects to use the money to accelerate its work on discovering genes that are associated with specific diseases, including osteoporosis, schizophrenia and heart disease.
The $20 million in financing, Gessler said, should provide enough operating cash for the next three years.
The company is also contemplating going public later this year if market conditions are right, according to Dr. Michael Brennan, Gene Logic's president. Hulsey said an IPO would be the most logical next step.
The lead investor in yesterday's round of private financing was Chicago-based Biotechvest, a private fund that invests in late-stage companies and publicly traded equities. It contributed $3 million.
Other new investors include Goldman Sachs Group, Hambrecht & Quist, WPG-Farber Weber Fund, all based in the United States, the PVJ Pension Fund in Denmark, and GeneChem Technologies Fund in Canada.
Gene Logic's two largest shareholders -- Oxford Bioscience Partners, of Westport, Conn., and Hambro Health Investors, of New York -- also participated in the financing deal signed yesterday.
In all, 13 investors joined in the deal.
The financing was Gene Logic's second since being established in 1995. It raised $9 million in its first financing in May 1996. The company moved to Columbia from New Haven, Conn., in April 1996.
The state, which provided $500,000 in financing to the fledgling company, has a 5 percent equity stake in the company.
Most recently, Gene Logic struck a deal worth a potential $25 million with Procter & Gamble Pharmaceuticals. The June agreement called for the two to work on determining which genes play a role in heart disease, the nation's No. 1 killer.
Pub Date: 7/16/97