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Published in U.S. 1 Newspaper on May 3, 2000. All rights reserved.
Life in the Fast Lane: Orchid Biosciences Inc.
Orchid BioSciences Inc. — a spinoff of the Sarnoff
Corporation — is scheduled to make its initial public offering
on either Thursday or Friday, May 4 or 5. The underwriters, led by
Credit Suisse First Boston, have priced the 8 million shares of common
stock at from $11 to $13 a share, so the company can expect to net
about $88.3 million. The money will be used for acquisitions and for
manufacturing capacity, either by buying companies or on a contract
After the IPO the company will have about 34 million shares of common
stock outstanding and would be worth — based on $12 per share
— about $408 million. It will trade on Nasdaq as ORCH.
The stock market has been taking desperate sprints in both directions,
but Orchid — which enjoys the luster of being a genetic research
company — is pushing forward anyway. At the heart of Orchid’s
technology is SNPstream, an automated, computer chip-like device that
can identify the transposed digits in genes — which scientists
call single nucleotidepolymorphisms, or SNPs, pronounced "snips"
— quickly, accurately, and cheaply. These little snip chips may
hold the key to a cornucopia of new medical diagnoses and treatments
— from identifying predisposition to genetically based diseases,
to targeting existing drugs to the individuals for whom they will
be most effective, to identifying the genetic bases of diseases and
developing drugs to treat them.
Variable drug response is a serious problem for which SNP technology,
if effective, would provide the only alternative to what we have today
— which is to take the drug and see what happens. "Adverse
drug reactions lead to 1 million hospitalizations and at least 120,000
deaths annually," said Dale Pfost, CEO, in a previous interview
(U.S. 1, December 8, 1999). "And in terms of lack of efficacy
of drugs, well, there’s really no way to know, but the numbers are
Orchid BioSciences recently changed its name (from Orchid Biocomputer)
and enlarged the board; one new board member is Ernest Mario, chairman
and CEO of Alza Corporation, former chief executive of Glaxo, and
former president and CEO of the medical products division of Bristol-Myers
Squibb (he is also the father of U.S. 1 contributor Christopher Mario).
Last month an announcement predicted Orchid might raise as much as
$96 million. The underwriters, which also include Robertson Stephens
and Salomon Smith Barney, have the option to buy an extra 1.2 million
shares to cover over-allotments.
The company began to be incubated at the Sarnoff Center in 1995 and
now has 220 employees. It is the first of more than a dozen Sarnoff
spinoffs to float its own IPO (www.sarnoff.com).
— Barbara Fox
East, Princeton 08540-2197. Dale R. Pfost, CEO. 609-750-2200; fax,
609-750-2250. Home page: www.orchidbio.com.
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