Ebb & Flow

Not only does Tularik's collaboration with Amgen provide funding and a seal of approval for TLRK's cancer platform, it also provides a smooth exit for a major investor - ZKB Pharma Vision - and removes the significant overhang of stock that ZKB was planning to sell.

ZKB, an early investor in TLRK, in January registered 11.4 million shares (21% of total shares outstanding), putting significant pressure on the stock (see BioCentury, Feb. 3). But now AMGN will purchase the ZKB shares for an undisclosed price as part of last week's multi-faceted deal.

In the mid-90s, when TLRK was still private, ZKB piled in a lot of money into the company at valuations so high that skeptics wondered if an exit would ever be possible. ZKB led a $60 million round in October 1996 that valued TLRK at $330 million. Eleven months later, it put in $51.3 million in a round that valued the company close to $400 million.

TLRK in part answered those questions when it IPO'd in December 1999 at a valuation of $590 million; which in the bubble environment quickly ran up to well over a billion. But ZKB held onto a good chunk of the shares. When the biotech market bottomed this year on March 7 - about a month after the shares were registered for sale - TLRK's valuation hit an all-time low of $206 million, much lower than the valuations for the ZKG-led private financings. The uptick in the biotech markets allowed TLRK to recover to about $335 million prior to the AMGN deal.

Thanks to a $3.22 (53%) move to $9.29 last week, TLRK's valuation now stands at $514 million. The stock jumped $2.05 (32%) to $8.39 on 5.2 million shares on Wednesday's news.

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