Ebb & Flow

Perlegen is remaining mum on when and if it will test the IPO waters, but there's a clear incentive for the company to join the public space this year. That's because the personalized medicine and reprofiling company will have a guaranteed investor - Pfizer (PFE) - in a 2006 IPO.

Last week, the pharma company invested $50 million in Perlegen and committed to invest up to an additional $25 million "in the event that Perlegen executes an initial public offering within the coming year."

The $50 million gives PFE a 12% stake in Perlegen, making it the second largest shareholder behind Affymetrix(AFFX), which spun out Perlegen in 2000 and owns a little less than 25% of the company.

Perlegen has raised a total of $207 million privately, excluding the money from PFE, and less than 15% of the money has come from traditional VCs (see "Profiling Perlegen's Money").

"We haven't made a conscious effort to reduce the VC capital," said Rob Middlebrook, chief corporate development officer. "It's more a function that personalized medicine has broad appeal. It is nice to have crossover investors, such as Maverick, although we have no definitive plans as to whether or when to go public." Maverick Capital is a hedge fund.

Also last week, Perlegen notched a fourth partnership with PFE. This time, the companies plan to run whole genome and replication studies to identify genes associated with "major" diseases and to predict patient responses to undisclosed medicines. The companies have three prior research deals to find genes or markers associated with cardiovascular disease, metabolic syndrome and drug response in depression (see B7).

Middlebrook told Ebb & Flow that last week's deal and investment were not linked. Going forward, he said that the "core focus of our cash will be on in-licensing activities. We'd like to have at least one more in-licensed compound in 2006."

Perlegen's strategy is to use genetic and pharmacogenetic data to reprofile or rescue compounds, with a focus on metabolic, cardiovascular and CNS disorders. The company got its first compound last year, when it acquired rights to MCC-555 from Mitsubishi Pharma. The PPAR agonist

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