| Gene Logic, Inc. | |||
| Ticker: | GLGC | 10150 Old Columbia Road | |
| Exchange: | NASDAQ-National Market | Columbia, MD 21046 | |
| Industry: | Service (SIC Code 8731) | (410) 309-3100 | |
| # of Employees: | 57 | ||
| Type of Shares: | Common Shares | Filing Date: | 10/7/97 | |
| U.S. Shares: | 3,000,000 | Offer Date: | 11/20/97 | |
| Non-U.S. Shares: | 0 | Filing Range: | $10.00 - $12.00 | |
| Primary Shares: | 3,000,000 | Offer Price: | $8.00 | |
| Secondary Shares: | 0 | Gross Spread: | $0.56 | |
| Offering Amount: | $33,000,000 | Selling: | $0.32 | |
| Expenses: | $600,000 | Reallowance: | $0.10 | |
| Shares Out After: | 13,382,377 |
| Manager | Tier | Phone |
| BancAmerica Robertson Stephens | Lead Manager | (415) 989-8500 |
| Hambrecht & Quist Incorporated | Co-manager | (415) 439-3626 |
| UBS Securities Inc. | Co-manager | (212) 821-4510 |
| Issuer's Law Firm: | Cooley Godward Castro Huddleson & Tatum |
| Bank's Law Firm: | Testa, Hurwitz & Thibeault |
| Auditor: | Arthur Andersen |
| Registrar/Transfer Agent: | ChaseMellon Shareholder Services, L.L.C. |
Dollar amounts in U.S. millions except for per share data | |||||
| 6 Month Ending Financials | |||||
| Full Year Audited Income | Latest Unaudited Income | Prior Unaudited Income | Balance Sheet | ||
| 12/31/96 | 6/30/97 | 6/30/96 | 6/30/97 | ||
| Revenue: | $0.00 | $0.17 | $0.00 | Assets: | $8.21 |
| Net Income: | -$2.88 | -$0.86 | Curr Assets: | $5.48 | |
| EPS: | -$0.60 | -$0.48 | Liabilities: | $4.74 | |
| Prior EPS: | -$0.80 | -$0.85 | Curr Liabilities: | $2.81 | |
| Cash Flow/Oper: | -$2.05 | $0.99 | $7.47 | Equity: | $3.48 |
| Cash Flow/Fin: | $8.83 | $3.57 | -$4.57 | Cash: | $5.10 |
| Cash Flow/Inv: | -$5.99 | $3.57 | Working Cap: | $2.67 | |
| Business Description |
| The company uses a proprietary system based on analysis of gene expression and gene regulation designed to accelerate the discovery of drug targets and drug leads. The Company believes that by building its portfolio of partnerships it will generate current revenues and establish a long-term economic interest in the product pipelines of multiple partners through milestone and royalty payments. Gene Logic has established major strategic alliances with Procter & Gamble Pharmaceuticals, Inc. ("Procter & Gamble") and Japan Tobacco Inc. ("Japan Tobacco"). The core of Gene Logic's ACCELERATED DRUG DISCOVERY system is its proprietary READS (Restriction Enzyme Analysis of Differentially-expressed Sequences) technology for analyzing patterns of gene expression. Gene Logic uses READS in its drug target and drug lead discovery programs and to generate genomic data for its database products. |
| Competition |
| Competition among entities attempting to identify the genes associated with specific diseases and to develop products based on such discoveries is intense. Gene Logic faces, and will continue to face, competition from pharmaceutical, biotechnology and diagnostic companies, academic and research institutions and government agencies, both in the United States and abroad. Several entities are attempting to identify and patent randomly sequenced genes and gene fragments, while others are pursuing a gene identification, characterization and product development strategy based on positional cloning. The Company is aware that certain entities are utilizing a variety of different gene expression analysis methodologies, including the use of chip-based systems, to attempt to identify disease-related genes. In addition, numerous pharmaceutical companies are developing genomic research programs, either alone or in partnership with the Company's competitors. Competition among such entities is intense and is expected to increase. In order to compete against existing and future technologies, the Company will need to demonstrate to potential customers that its technologies and capabilities are superior to competing technologies. Many of the Company's competitors have substantially greater capital resources, research and development staffs, facilities, manufacturing and marketing experience, distribution channels and human resources than the Company. These competitors may discover, characterize or develop important genes, drug targets or drug leads, drug discovery technologies or drugs in advance of Gene Logic or which are more effective than those developed by Gene Logic or its strategic partners, or may obtain regulatory approvals of their drugs more rapidly than the Company and its strategic partners, any of which could have a material adverse affect on any similar Gene Logic program. Moreover, there can be no assurance that the Company's competitors will not obtain patent protection or other intellectual property rights that would limit the Company's or its strategic partners' ability to use the Company's drug discovery technologies or commercialize therapeutic or diagnostic products, which could have a material adverse effect on the Company's business, financial condition and results of operations. The Company also faces competition from these and other entities in gaining access to cells, tissues and nucleic acid samples used in its discovery programs. The Company will rely on its strategic partners for support of certain of its discovery programs and intends to rely on its strategic partners for preclinical and clinical development of related potential products and the manufacturing and marketing of such products. Each of the Company's strategic partners is conducting multiple product development efforts within each disease area which is the subject of its strategic alliance with Gene Logic. Generally, the Company's strategic alliance agreements do not preclude the strategic partner from pursuing development efforts utilizing approaches distinct from that which is the subject of the alliance. Any product candidate of the Company, therefore, may be subject to competition with a potential product under development by a strategic partner. Future competition will come from existing competitors as well as other companies seeking to develop new technologies for drug discovery based on gene sequencing, target gene identification, bioinformatics and related technologies. In addition, certain pharmaceutical and biotechnology companies have significant needs for genomic information and may choose to develop or acquire competing technologies to meet such needs. Genomic technologies have undergone and are expected to continue to undergo rapid and significant change. The Company's future success will depend in large part on its maintaining a competitive position in the genomics field. Rapid technological development by the Company or others may result in products or technologies becoming obsolete before the Company recovers the expenses it incurs in connection with their development. Products offered by the Company could be made obsolete by less expensive or more effective drug target and drug lead technologies, including technologies which may be unrelated to genomics. There can be no assurance that the Company will be able to make the enhancements to its technology necessary to compete successfully with newly emerging technologies. |
| Business Plan |
| The company�s objective is to provide to its pharmaceutical company partners novel drug targets, drug leads and a suite of genomic database products in order to reduce the time, cost and risk associated with drug discovery. The Company believes that by building its portfolio of partnerships it will generate current revenues and establish a long-term economic interest in the product pipelines of multiple partners through milestone and royalty payments. The Company believes that this portfolio approach will maximize the likelihood of drugs being discovered and developed using its system. The Company's strategy for building commercial value is to: (I) Provide an Integrated Drug Discovery Platform, (ii) Establish Disease-Specific Drug Target and Lead Discovery Alliances, (iii) Establish Independent Drug Target and Lead Discovery Programs, (iv) Market Genomic Database Products Under Non-Exclusive License and (v) Retain Significant Rights to New Product Opportunities. |
| Use of Proceeds |
| The proceeds from the proposed offering will be used for research and development, capital expenditures, working capital and general corporate purposes including possible acquisitions of complementary technologies, products or businesses.. |
| Name of Shareholder | % Owned Before | % Owned After |
| Oxford Bioscience Partners | 15.40% | 11.60% |
| Cross Atlantic Partners K/S | 15.40% | 11.60% |
| Charles L. Dimmler III | 15.40% | 11.60% |
| Alan G. Walton, Ph.D., D.Sc. | 15.40% | 11.60% |
| New York Life Insurance Company | 6.70% | 5.10% |
| Altamira Management Ltd. | 6.40% | 4.90% |
| GIMV Investment Corporation | 5.20% | 3.90% |
| Officer Name | Title | Age |
| Alan G. Walton, Ph.D., D.Sc. | Chairman of the Board of Directors | 61 |
| Michael J. Brennan, M.D., Ph.D. | President, Chief Executive Officer and Director | 40 |
| Keith O. Elliston, Ph.D. | Senior Vice President and Chief Scientific Officer | 36 |
| Mark D. Gessler | Senior Vice President, Corporate Development and Chief Financial Officer | 36 |
| Victor M. Markowitz, D.Sc. | Vice President, Bioinformatics Systems | 44 |
| Daniel R. Passeri, J.D. | Vice President, Business Development and Intellectual Property | 36 |
| Gregory G. Lennon, Ph.D. | Vice President, Geonomics Research | 40 |
| Eric M. Eastman, Ph.D. | Vice President, Technology Management | 45 |