Wall Street has speculated for years on what valuation Tularik would go for in an IPO. The company has now provided an answer - and investors will soon give their response.

The company filed on Friday to sell 6.25 million shares at $11-$13, which would raise $68.75-$81.25 million. Depending on the final price, Tularik would sport a market cap of up to $538 million, with 41.4 million shares outstanding. About $111.2 million of that is the cash the company had in the bank at June 30.

Tularik is developing oral drugs based on gene regulation in the areas of cancer, infectious diseases, metabolic diseases, inflammation and immune disorders.

The guessing on Tularik's post-IPO valuation has been fueled by the high valuations it has garnered in its private financings (see Tularik Financing History). In its last private round in 1997, its valuation was in the neighborhood of $400 million, even though the company was in preclinical development.

Now Tularik's most advanced compound is lometrexol for cancer, in-licensed from Eli Lilly. Lometrexol has completed Phase I trials with Phase II studies expected to begin in 2000. The kind of market cap Tularik is asking for is usually seen in companies with compounds in Phase III trials, or at the least in significant Phase II studies.

But no one can argue about the company's timing - with plenty of cash it has been free to bide its time - as biotech stocks are as hot as they've been in years.

Major shareholders include PharmaVision 2000, which has 23.5 percent prior to the offering and would have 19.9 percent post-offering; Mayfield Fund, with 11.2 percent prior and 9.6 percent after. Underwriters are Lehman, Hambrecht & Quist, J.P. Morgan and Warburg Dillon Read.

Market hopefuls

Perstrop, a Swedish plastics and chemicals group, announced its intention to spin off biotech supplier Perbio Science. Perstrop shareholders will get one Perbio share for every two of the parent's shares held. Perbio, which had net sales of SKr527 million ($64 million) for the first six months of 1999, was to be listed on the Stockholm stock exchange this week.